Justice in International Tax Law
The book examines fundamental design principles used in international tax policy, as well as some important rules of the current international tax regime.
Why this book?
The main purpose of this book is to review the most fundamental design principles used in international tax policy and some of the most important rules of the current international tax regime. The benchmark for such review is justice as understood in recent theory of political philosophy. The book is structured into three main parts.
The first part outlines the international law framework in which the international tax regime operates. It looks at the different sources of international law, such as treaties, customary law, general principles of international law and soft law, in order to demonstrate how these sources are (or are not) influenced by moral theory in general and by the notion of justice in particular. This part aims at demonstrating that the international law framework does not provide for detailed guidance on how to improve the international tax regime. This represents an important contrast with domestic tax systems in which a constitution sets certain orientation lines for the legislator.
Based on an in-depth understanding of the international law framework, the second part looks at the recent debate concerning justice in political philosophy. It refers to the existing theories of global justice in order to analyse whether these theories contain elements that can be used to improve the international tax regime. The author concludes this part with his own position on a theory of global justice.
The third part reviews some of the most important principles and rules of the international tax regime in respect of their normative validity. That is, the author reviews whether a given principle or rule indeed helps to design a just international tax regime – or whether its application could even lead to injustice. Such analysis is based on the results developed in the second part of the book. The author reviews the following principles: inter-nation equity, ability to pay, efficiency, and the source and benefit principles. In addition, the author discusses the following rules: the arm’s length principle, anti-abuse provisions, mandatory arbitration, fiscal transparency and CFC rules.
Prof. Dr Peter Hongler is a professor of tax law at the University of St.Gallen. He was a postdoctoral researcher in the academic department of IBFD. He obtained his PhD from the University of Zurich and his Master’s and Bachelor’s in law from the University of Bern.