MJIEL Vol 1 Issue 2 2004 - A2


The degree of autonomy or interdependence between international taxation and international trade has occasionally raised great controversy among major experts from the international tax and trade communities. In most cases, though, the review of the relationship between these two fields is limited to a comparative presentation and evaluation of the respective legal frameworks without a deeper policy perspective and orientation. In this respect, the author of this article argues that the question of the relationship between international taxation and international trade could also be approached from a rather theoretical path, namely that of the parallel application of the traditional fiscal principles of equity and neutrality in the world trade regime. Furthermore, since the scope of both fields is extensive, such an approach uses as an example the basic anti-treaty shopping laws and policies observed in todays international tax sphere, attempting to draw some analogies with similar international trade policies and, thereby, seeking for common grounds for evaluation and review. Notwithstanding any inherent limitations to the contrary, this theoretical and, somehow, experimental approach undertakes to offer, to the extent possible, conceptual integrity and consistency in the study of the contemporary international tax and trade environment, which, in turn, may contribute to the elaboration of the ongoing discussion regarding the prospects of approximation and/or convergence between the two areas.

The insertion of international trade considerations in the tax framework may, at first glance, seem at odds with the separate nature and character of each regime. It is true that the task of analysing both systems under common principles has not been an easy one and, as a result, there is not extensive literature thereof. Even in cases of such an examination, though, there is more than one approach observed, a fact which bears confusion to both expert communities.

Among the various issues arising as to the demarcation and delineation of those two spheres of law, a major one is whether they can be both evaluated according to the same standards and principles. In particular, the problem is whether the traditional fiscal principles of equity and neutrality apply to international trade or, at least, have a bearing thereon. The answer thereto is essential for the identification of common grounds between the two areas. A general conclusion as to the relevance of international trade standards to international taxation and/or vice versa, may act as a determinant, following a deductive reasoning, for more accurate findings on the special aspect of compatibility of anti-abuse laws and practices with basic international trade norms.

This piece of work is, therefore, divided into three separate parts. A first introductory part attempts to describe briefly the notions of equity and neutrality and especially their implementation and performance in the international fiscal sphere. A second part is employed to possibly identify common grounds between international taxation and international trade. Finally, the last part focuses on (any) implications that trade imperatives may carry for anti-treaty shopping policies. Needless to say, the international trade framework is a huge one, comprising a number of multilateral (and some plurilateral) agreements. Therefore, it would be impossible and, perhaps, irrelevant to enter into a meticulous reference to and examination of all such materials. The aim, instead, is to focus on those aspects of international trade that affect or, generally, are related to international taxation and, most importantly, to identify and compare the evaluating tools and standards employed in both fields.

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