2026
Australian Tax Treaty Policy: The Dilemma of a Wealthy Capital-Importing Nation
This article examines Australia’s tax treaty policy from the perspective of a capital-importing but high-income jurisdiction. It explores the tension between Australia’s interest in protecting its source-country tax base and the constraints imposed by prevailing OECD treaty norms. Through analysis of treaty practice and policy choices, the article highlights structural trade-offs faced by capital-importing countries in negotiating withholding taxes, permanent establishment thresholds, and allocation rules within the existing international tax framework.
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Income Shifting from Transfer Pricing: Further Evidence from Tax Return Data by
This article presents new empirical evidence on income shifting through transfer pricing using tax return data. The analysis evaluates the extent to which multinational enterprises continue to reallocate income across jurisdictions despite existing transfer pricing rules and enforcement mechanisms. The findings contribute to ongoing debates about the effectiveness of arm’s-length standards, enforcement capacity, and the empirical foundations underlying international tax reform efforts.
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Citation: McDonald, Michael, Income Shifting from Transfer Pricing: Further Evidence from Tax Return Data, 94 Journal of Public Economics 555 (2010).
Earlier version available at SSRN: https://ssrn.com/abstract=6022454.
The Pillar Two Regime in the Post-Implementation Era: Structural Mechanics and Geopolitical Fragmentation (2026)
This article analyzes the OECD Pillar Two global minimum tax following its initial implementation phase, focusing on the structural mechanics of the regime and emerging signs of geopolitical fragmentation. The author examines how divergent domestic implementation choices, enforcement asymmetries, and coordination challenges affect the operation of the income inclusion rule and undertaxed profits rule. The article highlights risks to coherence and convergence as jurisdictions adapt Pillar Two to local political and fiscal priorities.
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Withholding Taxes in Developing Countries: Relief Method and Tax Sparing in Tax Treaties with OECD Members
This article examines how residence-country double tax relief methods and tax sparing provisions shape negotiated withholding tax outcomes in tax treaties between developing countries and OECD member states. Focusing on portfolio dividend withholding taxes, the analysis shows that treaties with credit-method residence countries tend to produce larger gaps between domestic withholding rates and treaty ceilings than treaties with exemption-method partners. The study further demonstrates that tax sparing provisions neutralize this effect, enabling developing countries to sustain higher negotiated withholding taxes. The findings contribute to debates on treaty design, distributive consequences of relief methods, and the role of tax sparing in preserving source-country taxing rights.
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