Actual challenge in international corporate taxation: shifting the obligation of conduct into obligation of result

Abstract

The research answered whether cooperation in ruling corporate taxation, a traditional obligation of conduct of sovereign states, was undergoing profound transformation into the obligation of result. The analyzed topic was not whether the tax authorities want or should cooperate (which is answered per se), but rather how to appropriately respond to the international taxation requirements for strengthening the multilateral agreements. Tax authorities worldwide have expressed concerns about identifying efficient regulation, and the development of multilateral agreements to combat tax evasion was under long and often unproductive negotiation. The empirical analyses of relevant literature and jurisprudence helped formulate an opinion on the regulation’s efficiency in strengthening multilateral taxation. The need to change the nature of the state’s obligation to negotiate fiscal regulation was not mentioned explicitly in hard law. Still, it was indirectly supported by soft law instruments, such as state representatives' continuous yet divergent dialogue and the approaches presented in the international courts' jurisprudence. The consistent influence on the obligation to support developments in international law in corporate taxation was justified, given the limit when considering its conduct nature, compared to potential benefits generated by the obligation of result.