Papers & Reports

This article examines how states might equitably share tax revenue from cross-border activities that give rise to overlapping claims of taxing rights. It categorizes the prevailing normative perspectives into two distinct approaches. The first focuses on locating the economic factors that enable income production and allocating taxing rights proportionally to the degree of a state’s economic connection, thereby granting greater taxing rights to states more closely tied to the income-generating activity. The second, which draws on cosmopolitan distributive justice theory, views cross-border tax revenue allocation as a mechanism for redistributing resources from high-income to low-income countries to support humanitarian or developmental objectives. By distinguishing between these frameworks, the article clarifies the conceptual underpinnings of inter-nation equity debates and their implications for international tax policy.

This Policy Brief assesses the Trump administration’s “reciprocal” tariffs, most recently revised on August 1, 2025, and concludes that both their rationale and execution are flawed. The author argues that because bilateral trade imbalances do not inherently prove unfair practices, the tariffs relied on a defective metric, with the methodology systematically overstating tariff levels, especially for primary commodity exporters where pass-through effects on U.S. consumer prices are high. According to the author, given these biases, the tariffs appear less as genuine measures of foreign trade barriers and more as a negotiation tactic to bolster U.S. leverage. The brief further warns that even at a reduced rate of 15 percent, applying such tariffs to the poorest U.S. trading partners would do little to narrow the overall trade deficit while severely undermining their economic development.

Peterson Institute for International Economics Policy Brief 25-6

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.