Multilateral Cooperation in Tax Law

1. Introduction

Tax revenue is critical to a state’s operation; without it, governments cannot fulfil administrative or redistributive responsibilities. Tax revenue is used to pay for administration and defense, to build roads and hospitals, to pay for pensions and social benefits, and to finance schools and universities. Additionally, it is used to re-pay the sovereign debt. Especially in times of crisis, it becomes apparent how much everyone depends on a capable state.

As a consequence of aggressive tax planning, tax avoidance, and tax evasion activities, however, the word lost an estimated USD 427 billion in tax revenue in 2020 according to a study by the Global Alliance for Tax Justice whereby this estimate is, at best, an intelligent guess due to the lack of transparency.

Since the 2008 financial crisis in particular, the G20 have intensified their collective (verbal) action against tax havens, declaring an end to banking secrecy at the S. 56London Summit in April 2009 and threatening the use of countermeasures against “uncooperative tax jurisdictions”. As a result of this momentum, tax countries blacklisted by the OECD hurried to persuade the world that they adopt the OECD minimum st...