Papers & Reports

This article provides a comprehensive overview of the 2025 update to the United Nations Model Tax Convention, marking the culmination of four years of deliberations by the UN Tax Committee on pressing cross-border tax issues. The updated UN Model reflects evolving priorities in international tax cooperation, particularly emphasizing the needs of developing countries in tax treaty negotiations. Key revisions address areas such as digital economy taxation, source-based taxation rights, and dispute resolution mechanisms, signaling a broader shift toward enhancing tax equity and administrative capacity in lower-income jurisdictions. The report not only clarifies substantive treaty provisions but also highlights emerging trends in global tax policy debates, including stronger assertions of source-country rights and increased recognition of unilateral measures that align with fairness and development objectives. As such, the 2025 update functions both as a technical guide and a normative signal of future directions in international tax treaty practice.

Note: This report was written for and first published by the Tax Justice Network.

This article critiques the European Commission’s and EU courts’ handling of the Apple state aid case, arguing that the Commission improperly applied a retroactive profit allocation method that lacked support in Irish law or binding international tax standards. The article details procedural and substantive flaws, including the Commission’s reliance on post hoc OECD guidance, internal inconsistencies in its legal theories, and disregard for factual evidence concerning the actual control over Apple’s intellectual property. It further faults the General Court for introducing new justifications absent from the Commission’s original decision and for misapplying superficial parallels between Irish law and the OECD’s Authorized OECD Approach. The Court of Justice is also criticized for reinstating the recovery order based on a procedural technicality, thereby evading a more thorough legal analysis and undermining prior precedent in similar cases such as Fiat, Amazon, and Engie. The article contends that this approach threatens legal certainty, infringes on Member State tax autonomy, and damages the legitimacy of state aid enforcement in the tax context. As a corrective, it proposes reforms aimed at enhancing procedural transparency, limiting retroactive enforcement, and clarifying the doctrinal basis of EU tax state aid law to preserve both the rule of law and tax sovereignty.

This article offers a forward-looking analysis of how artificial intelligence is reshaping corporate tax compliance and financial reporting. Drawing on both quantitative data and qualitative case studies, the study examines the use of machine learning, natural language processing, and predictive analytics to automate and enhance key tax functions. The findings show that AI improves data accuracy, reduces human error, and enables real-time compliance monitoring, especially in complex regulatory environments. The research emphasizes the need for ethical AI governance, internal controls, and alignment between tax, IT, and legal teams. By presenting a phased model for implementation and actionable recommendations, the article provides a strategic roadmap for businesses and regulators seeking to integrate AI into the tax lifecycle.

This article analyzes the evolving legal strategies aimed at expanding source-based taxing rights over technical and digital cross-border services, with particular attention to developments within the United Nations' Framework Convention on International Tax Cooperation. It investigates how the UN’s approach to taxing services rendered across borders intersects with current geopolitical tensions and debates over tax sovereignty. Drawing on Latin America’s longstanding experience in taxing technical services and technical assistance, the paper illustrates how these regional practices have informed recent global policy responses to economic digitalization. In doing so, the article highlights the growing momentum toward enabling source jurisdictions, particularly in the Global South, to assert taxation rights over income arising within their economies, even absent physical presence.

This article analyzes how the 2018 US-China trade war affected tariff evasion by US importers. Using detailed product-level data and a staggered difference-in-differences approach, the study finds that tariff evasion rose by 14%, mainly through underreporting import quantities. Misclassification between product categories occurred but had limited economic significance, and no significant price underreporting was detected. Evasion was more prevalent for differentiated goods, products with strong pre-war Chinese export growth, and goods with low substitution elasticity, while intermediate products saw less evasion.

This article examines how investors in the United States and China reacted to escalating trade policy announcements between February and April 2025. Using an event study approach across markets, sectors, exchange rates, and volatility indices, the analysis finds asymmetric and behaviorally driven market reactions. Chinese markets initially responded positively in technology but later experienced sharp declines across multiple sectors, coupled with currency appreciation. U.S. markets showed limited negative responses to Chinese announcements, with some positive reactions in technology. The findings reveal asymmetric interdependence between the two economies and challenge assumptions of market efficiency in the face of trade policy uncertainty.

This piece evaluates the UN Zero Draft Terms of Reference (ToR) as a foundational step toward a UN framework convention on international tax cooperation. It situates the ToR within the broader context of increasing cross-border transactions, digitalisation, and the inadequacies of existing international tax frameworks—particularly for developing economies. While acknowledging the OECD’s twin pillars, the piece argues that the UN ToR offers a more inclusive and equitable approach by addressing key concerns such as taxation of digital and cross-border services, high-net-worth individuals, and illicit financial flows. It praises the ToR's emphasis on nexus-based taxing rights and fair allocation principles, concluding that bloc-based multilateral treaties may offer a pragmatic path forward for the Global South to strengthen tax sovereignty and encourage broader international participation.

This article analyzes the evolution and current challenges of the U.S. foreign tax credit (FTC) system in the context of modern international taxation, particularly under the OECD/G20 Inclusive Framework’s Pillars One and Two. It begins by tracing the historical development and policy rationale behind the FTC, a core feature of U.S. tax law since 1919. The article then examines how the Tax Cuts and Jobs Act (TCJA), especially the GILTI provisions, has reshaped the operation and effectiveness of the FTC. With many jurisdictions already implementing the Pillar Two global minimum tax, the paper argues that the United States’ inaction could result in substantial revenue losses and reduced competitiveness for U.S. multinationals. The article also explores recent controversies, including definitional changes in 2022 FTC regulations concerning what qualifies as a creditable foreign income tax. By assessing the intersection of traditional FTC principles and the demands of a rapidly shifting global tax environment, the article advocates for a “leveling up” approach. This approach seeks to modernize the U.S. FTC rules in a way that aligns with global standards while preserving the policy goals of preventing double taxation and promoting cross-border investment.

This article quantifies the compliance costs of transfer pricing regulation by examining how multinational enterprises (MNEs) in Norway responded to enhanced documentation requirements. Using linked administrative tax, trade, and employment data, the study finds that the reform significantly increased MNEs’ reported profits, tax payments, and expenditures on tax advisory services. Specifically, external consultant costs rose by 25%, while in-house legal and accounting expenses surged by 50%. Smaller MNEs faced a relatively higher compliance burden, suggesting that transfer pricing regulation, while effective in boosting tax transparency and revenue, imposes substantial costs—particularly for less-resourced firms. These findings underscore the need for carefully calibrated anti-avoidance measures that balance enforcement with administrative feasibility.