Double taxation imposes a significant barrier to global trade and investment. Traditionally, bilateral tax treaties (of which Australia has concluded more than 40) have attempted to eliminate double taxation, but disputes often arise about how these treaties should be interpreted and applied.
International organisations such as the OECD have sought to encourage the use of mandatory arbitration clauses to resolve these matters. However, this move has met with significant resistance from member nations.
In a recent post at austaxpolicy.com, Michelle Markham explores the reasons for this resistance and argues that arbitration of international tax disputes presents significant advantages to both governments and taxpayers.