Tax Policy Challenges in the 21st Century

S. 274I. Introduction

Social, political and economic communities have evolved over the past decades, business models and international trade flows have changed and have become more complex. Investments, businesses and people are living in a world characterized by a high degree of mobility. In contrast, international tax standards have not changed significantly for a long time. To react to these new issues and to counter what is perceived as ‘aggressive tax planning’, the OECD has recently released an “Action Plan to address Base Erosion and Profit Shifting” which has been endorsed by the G20.

International tax issues, in fact, are becoming more popular in the public debate, involving not only tax professionals, academics and tax administrations but also NGOs, international organizations and the highest levels of national governments. The current debate in the international tax arena is led on the one side by NGOs, governments and international organizations which claim – vox populi – that certain taxpayers, i.e. multinational enterprises, should pay their ‘fair share of taxes’. On the other side, multinational enterprises argue that they are paying the taxes that are legally – dura lex sed...