State sovereignty, individual autonomy and the jurisdiction to tax

• In Event: International

Abstract

What are the limits on countries’ jurisdiction to tax in a globalised world? What should they be? In recent years countries have imposed taxes in an increasingly geographically expansive manner. GloBE’s UTPR has been widely discussed and has elicited a strong response from the Trump administration. But there is an increasing number of further examples from countries all over the world - this is a growing trend. And there have been calls to go even further, most recently in a report by Gabriel Zucman commissioned by the Brazilian G20 presidency: A Blueprint for a coordinated minimum effective taxation standard for ultra-high-net-worth individuals.

Countries’ jurisdiction to tax is constrained by law and administrability. But there may also be good policy reasons for countries to refrain from exercising taxing rights in such a geographically expansive manner even if permitted by law and administratively feasible. These include considerations relating to countries’ sovereignty, individual autonomy, and the overall health of the international tax system. This paper makes three contributions to the literature. First, it identifies and schematises the different ways in which taxing rights are being applied in an increasingly expansive geographical manner. Second, it examines the legal (domestic and public international law) constraints on countries’ jurisdiction to tax. Third, it asks whether there are good policy reasons for countries to refrain from exercising taxing rights in an expansive manner even if permitted by law and administratively feasible.

Author

• John Vella, University of Oxford