Fresh Ideas Emerge for New EU Budget Levies

This paper provides a technical primer on the Fifth Session zero-draft protocol on the taxation of cross-border services under the proposed UN Framework Convention on International Tax Cooperation. It explains the draft’s treaty-style structure, including provisions on the allocation of taxing rights, relief from double taxation, dispute settlement, and administrative assistance, and identifies key innovations and gaps that may be addressed during the negotiation process.

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This article examines what the authors describe as a paradox in U.S. federal tax policy: rejecting broad-based consumption taxation while relying on tariffs as a source of federal revenue. It traces the historical development of U.S. tax and tariff policy, presents empirical models of the economic consequences of this policy choice, and compares tax systems in other countries in outlining potential approaches to federal revenue reform.

Citation: 14 Tex. A&M L. Rev. __ (forthcoming 2026).

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This essay examines the legal authority of the U.S. president to impose secondary tariffs on countries that trade with targeted states, including Iran, Russia, Venezuela, and Cuba. It considers whether existing U.S. law authorizes the use of tariffs as instruments of indirect economic coercion and whether wartime circumstances affect the scope of presidential tariff authority in light of the Supreme Court’s decision in Learning Resources. The authors also consider whether Congress should delegate such tariff powers to the executive and, if so, under what constraints.

Citation: 120 Am. J. Int’l L. _ (2026).

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This paper examines the continuing relevance of the place of effective management (POEM) test for corporate tax residence under India’s Income Tax Act following the OECD’s BEPS 2.0 reforms. It argues that the Pillar Two Global Anti-Base Erosion (GloBE) rules reduce POEM’s traditional anti-avoidance role for large multinational enterprises by emphasizing effective tax rates rather than jurisdictional residence, while concluding that POEM remains relevant for entities outside the scope of Pillar Two, treaty residence determinations, and governance-based tax planning. The paper also examines the interaction between POEM and Pillar Two, highlighting areas of regulatory overlap, conceptual divergence, and increased compliance costs.

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This paper develops a comprehensive legal and economic framework for taxing cross-border services. It compares destination-based consumption taxes such as VAT, gross-revenue taxes including digital services taxes, income-based nexus and withholding rules, and anti-avoidance measures directed at deductible cross-border service payments. The authors argue that evaluating these instruments separately obscures their interactions and conclude that broader reliance on destination-based taxation may address the challenges posed by digitalized services trade more effectively than narrower and more distortionary alternatives.

Citation: CESifo Working Paper No. 12845

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This paper examines the relationship between tax competitiveness and business research and development expenditures across EU countries. Using data from the International Tax Competitiveness Index, OECD, and Eurostat, the authors assess the effects of corporate tax rules and tax-policy instruments on private-sector R&D. They find that overall tax competitiveness is significantly associated with business R&D expenditures, while the effects of R&D tax credits are mixed, and they highlight the importance of less-studied instruments such as tax depreciation rules.

Citation: Business, Management and Economics Engineering, volume 24, issue 2, 2026[10.3846/bmee.2026.24203]

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This paper examines whether a Qualified Domestic Minimum Top-up Tax that effectively eliminates the benefit of domestic tax incentives could breach investment-treaty protections. Revisiting the Micula v. Romania arbitration, a rare merits award centered on a host state’s cancellation of tax incentives, the author assesses when the introduction of a QDMTT may violate the fair-and-equitable-treatment standard. The paper highlights the potential tension between implementation of the OECD Pillar Two Global Minimum Tax and states’ obligations under international investment agreements.

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This article examines whether Pigouvian taxes remain effective when the relevant markets and harms extend across national borders. The authors develop a framework centered on the location of markets and harms, interjurisdictional competition and heterogeneity, and distributional considerations to determine when cross-national coordination is necessary and feasible. Applying the framework to carbon emissions, financial transactions, soda consumption, and wealth concentration, the article identifies structural risks of evasion, arbitrage, and regulatory failure and proposes design features that may improve the effectiveness of cross-border corrective taxation.

Citation: Cardozo Legal Studies Research Paper No. 2026-15 (forthcoming U.C. Davis L. Rev.)

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This paper examines how U.S. public firms respond to increased scrutiny from foreign tax authorities following the Tax Cuts and Jobs Act of 2017. Using proprietary data on H-1B visa lottery outcomes, the authors find that firms with greater exposure to foreign tax audits are more likely to recruit foreign tax experts and that firms whose petitions are randomly selected subsequently achieve more favorable audit outcomes. The effects are concentrated among experts with prior experience dealing with foreign tax authorities and suggest that specialized local institutional knowledge can reduce firms’ cross-border tax-enforcement burdens.

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This paper examines how U.S. multinational enterprises respond to the Global Minimum Tax under Pillar Two. Using historical ownership data and the EU’s adoption of Pillar Two, the authors find that U.S. multinationals are significantly more likely than European multinationals to restructure ownership chains to reduce exposure to the minimum tax, while U.S. firms with tax haven exposure show no detectable increase in effective tax rates. Survey evidence from U.S. tax directors further supports the analysis, and the authors conclude that corporate restructuring and tax-policy responses by low-tax jurisdictions substantially weaken the intended effects of the Global Minimum Tax.

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