Tax Treaty Negotiations: Myth and Reality

Tax treaties are the building blocks of the international tax regime. There are currently over 3,000 tax treaties that regulate the lion’s share of cross-border investment. They are largely fashioned after a single model reflecting an increasing convergence of international tax norms. Despite this convergence, and nearly a century passing from when the first modern tax treaties were formalized into a model, there remains a great many unanswered fundamental questions about their application, interpretation, and effectiveness. The recent global discontent with the norms of the international tax regime clearly exposed the importance of these questions. This discontent eventually led to perhaps the single most extensive reform initiative for that regime, known as the BEPS Project. Much effort and energy were spent on the study of tax treaties before, during, and in the aftermath of this project. Yet surprisingly, almost no effort has ever been made to study the actual making of tax treaties and their negotiation. This article aims to begin filling this void with a pioneering survey of tax treaty negotiators that documents the process and launches a discourse over its implications for the interpretation and reform of international tax law around the world.