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Tax scholars generally agree that the years since the 2008 financial crisis have seen the emergence of a new international tax order, characterized by an increase in transparency, cooperation, and coordination among countries in matters of international tax policy. Such increased cooperation and coordination can be seen, for example, in recent global talks and moves towards agreement on a global minimum tax. A central—if not the central—component of this new order is the Organisation for Economic Cooperation and Development (OECD) and G20 Base Erosion and Profits Shifting (BEPS) Project, which was developed starting in 2013, and the BEPS Inclusive Framework, which was established in 2016. The BEPS Inclusive Framework is a multilateral agreement through which member countries commit to reforming their domestic tax laws and treaties to reflect the standards and policies articulated by the Framework. Its goal is to curtail tax avoidance, profit shifting, and other harmful behaviors by multinational enterprises (MNEs) that erode domestic tax bases and drain tax revenues. Spearheaded by the OECD at the request of the G20, the BEPS Inclusive Framework is undoubtedly one of the most important recent developments in international taxation. It is having clear impacts on domestic and cross-border tax law regimes. The effectiveness and reach of the BEPS Project and Inclusive Framework will impact how much revenue nation states can raise, the global distribution of tax revenues, and the capacity of welfare states around the world.

In short, this Article reveals how international organizations like the OECD can work in tandem with powerful actors like the EU to generate far-reaching scripts, norms, and models that shape global tax institutions and ultimately affect domestic tax regimes around the world. Its findings show how these actors may exert pressure on developing countries to adopt these scripts through a combination of normative and coercion-based processes. These findings also have implications for high-stakes claims frequently made by international tax commentators and policymakers. In particular, the findings about the interplay between EU tax haven listing processes and Inclusive Framework membership provide an important counter-narrative to accounts that have emphasized the increased voice and representation enjoyed by developing countries in the emerging global tax order. While a common and arguably dominant narrative surrounding the BEPS Project is that developing countries are well-represented and willing participants in the project by virtue of the endorsement and presence of the G20 in spearheading it, the apparent role of EU listing processes in motivating BEPS membership suggests that fears of the economic and political consequences of being listed might to some extent be driving developing country participation, and that this pathway might merit closer scrutiny. If coercion-based pathways are indeed playing a role in motivating Inclusive Framework membership and participation in follow-on initiatives, this implicates the legitimacy and inclusiveness of the BEPS Project and raises questions about its likelihood of success and substantive outcomes (including distribution among countries).


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7 Oct 2022
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  • Subject
    • International Law

    • Taxation-International

  • Journal title
    • Yale Journal of International Law

  • Volume
    • 47

  • Pagination
    • 199-307

  • Date submitted

    7 October 2022