Objectives

The course at a glance

• Impact of globalization and new challenges on international tax policy.

• Multilateral responses to international tax policy challenges, consensus formation in international tax relations; strategic and political dimension of international tax policy.

• Discussion of selected key pressure areas (tax competition and aggressive tax planning, fiscal challenges raised by the digitalization of the economy, impact of the COVID 19 crisis on international tax policy, impact of international tax policy developments for boards of MNE groups “tax in the boardroom”.

Background and reasons for the course

International tax policy may be loosely defined as the set of principles shaping the taxation of returns from international trade and investment, the allocation of these returns between countries and the prevention of international double taxation with a view to promote economic growth. Traditional international tax principles were initially developed in the 1920s.

The 2008 financial crisis, however, led to a major reconsideration of traditional international tax principles. At that point, international tax policy became a key priority for G20 countries. There was then a growing perception that international tax rules designed in the 1920s had not kept pace with the internationalization of business relations and offered what was described as “aggressive tax planning” or “Base Erosion and Profit Shifting” (BEPS) opportunities. The OECD/G20 BEPS project which emerged in 2013 and was designed to “fix” the international tax system represented the first milestone of what would quickly become a new multilateral vision of international tax policy. This vision materialized in the so-called “Inclusive Framework” (IF) bringing together over 135 countries (including Switzerland) committed to work together on the BEPS multilateral agenda. Yet, after the delivery of the OECD BEPS outcome in 2015, the pressure on international tax policy continued with more fundamental fiscal challenges such as those triggered by the digitalization of the economy, tax competition and, of course lately, the COVID-19 crisis. The ongoing work of the OECD designed to resolve the challenges posed by digitalization underscores the tension between so-called residence and market countries. Likewise, the current discussions around international tax competition designed to stop “a race to the bottom on corporate taxes” are equally sensitive.

Objectives of the course

This course aims at exploring international tax policy in a holistic fashion and, to that end, bridges its legal, strategic and political dimensions. In particular, the course discusses how international consensus is negotiated and formed at the level for example of the G20, the OECD and the Inclusive Framework. The courses also looks at the dynamics of international tax policy, such as the public’s perception, the political and economic context as well as the role of elements such as “tax morale” and reputational risks triggered by taxes and the impact of these elements on corporate tax governance.

Contents

Content structure and content

The course is structured in three parts.

Part I: Setting the scene: foundations of the international tax system and pressure areas

The first part of the course sets the scene, explores the foundations of the international tax system and identifies the “pressure areas” induced by the internationalization of business relations.

Part II: Multilateral responses to international tax policy challenges

The second part of the course looks at the multilateral responses to current international tax policy challenges. Beyond the description of the ongoing work of the OECD and G20 as well as that of the European Union, the dynamics of international tax relations, the process of consensus formation are discussed. Moreover, the impact of factors such as the economic and political environment at a given point in time, the balance between developed and developing countries, general public’s perception are also discussed. Attention is also paid to Switzerland’s position in the debate, both from an international and internal perspective.

Part III: Discussion of selected topics

• Tax competition and aggressive tax planning

• Fiscal challenges raised by the digitalization of the economy

• Impact of the COVID 19 crisis on international tax policy

• Impact of international tax policy developments for boards of MNE groups (“tax in the boardroom”)

References

All relevant materials relating to the course shall be available on Moodle

Evaluation

First attempt

Exam:

Written 2h00 hours

Documentation:

Allowed with restrictions

Calculator:

Not allowed

Evaluation:

Examen organisé par la faculté de Droit

Examen en ligne

Retake

Exam:

Written 2h00 hours

Documentation:

Allowed with restrictions

Calculator:

Not allowed

Evaluation:

Examen organisé par la faculté de Droit