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The Complementary Role of the WTO in the Enhancement of the Base Erosion and Profit Shifting Project

Zhao, L., Karaivanova, A. and Zhang, P. (2021). The Complementary Role of the WTO in the Enhancement of the Base Erosion and Profit Shifting Project. World, 2(2), pp. 267-294. doi: 10.3390/world2020017


The current rules on international tax do not function properly due to the gaps which allow for tax manipulation. Whereas most tax agreements largely contribute to the prevention of double taxation, they do not effectively approach double non-taxation matters arising from tax competition based on the agreements’ bilateral nature. In order to tackle this issue, the Base Erosion and Profit Shifting project was introduced. Developed under the Organization for Economic Co-Operation and Development framework, the Base Erosion and Profit Shifting project deals with tax avoidance practices that use mismatches and gaps in tax rules. Nevertheless, the success of this new soft law initiative requires a forum that can promote and enforce its recommendations. The structural nature of the Organisation for Economic Co-operation and Development has led to the consideration of the World Trade Organization to be this forum by many. However, the World Trade Organization covered agreements are drafted in a way that includes some of the tax competition matters but not others, including traditional tax havens. This paper aims to bridge the gaps in the area of the international tax regime. By examining the international trade and international tax regimes, it is shown that there is space for variations in the World Trade Organization broadly drafted agreements for such matters to find a resolution. It is argued that the World Trade Organization can play a complementary role in the enforcement of the new international tax rules.

Publication Type: Article
Additional Information: Copyright:© 2021 by the authors.Licensee MDPI, Basel, Switzerland.This article is an open access articledistributed under the terms andconditions of the Creative CommonsAttribution (CC BY) license ( This article has been published in World, MDPI. DOI:
Publisher Keywords: Base Erosion and Profit Shifting (BEPS); World Trade Organization (WTO); international tax regime; Organisation for Economic Co-operation and Development (OECD); global tax reform
Subjects: H Social Sciences > HJ Public Finance
K Law
Departments: The City Law School > Academic Programmes
Date available in CRO: 03 Jun 2021 10:52
Date deposited: 3 June 2021
Date of acceptance: 10 May 2021
Date of first online publication: 14 May 2021
Text - Published Version
Available under License Creative Commons Attribution.

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