Multilateral Cooperation in Tax Law

S. 77The Limits of Bilateral Treaties and the Blending between Bilateralism and Multilateralism

Megumi Unami

1. Introduction

With the BEPS project, international taxation has seen increased multilateral cooperation including the adoption of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI). In this connection, some authors have pointed out the shift from bilateralism to multilateralism in the international tax law. Despite the increased attention to multilateralism, the international tax law still remains predominantly based on bilateral treaties. According to the OECD, there are more than 3,000 bilateral tax treaties in force around the world. As bilateral tax treaties are negotiated between two contracting states, as analysed by many scholars, bilateral tax treaties do not always work properly with multinational enterprises, which is discussed in detail in section 2 of this thesis. On the other hand, multilateral tax treaties (MTTs) also exist, and several authors have written on potential advantages of MTTs, as discussed in section 3.3. of this thesis. This thesis discusses the limits of bilateral tax treaties, examine...