The OECD Harmful Tax Competition Report: A Retrospective after a Decade
![handle is hein.journals/bjil34 and id is 775 raw text is: THE OECD HARMFUL TAX COMPETITION
REPORT: A RETROSPECTIVE
AFTER A DECADE
Reuven S. Avi-Yonah*
INTRODUCTION: Two VIEWS OF THE OECD REPORT
E leven years ago the Organisation for Economic Co-operation and
Development (OECD) published its report Harmful Tax Com-
petition: An Emerging Global Issue' (OECD Report or Report).
The Report identified for the first time two problem areas facing interna-
tional income taxation of geographically mobile activities: tax havens
and harmful preferential tax regimes.2 It sought to initiate activities to
eliminate both types of problems.3
Over a decade has passed, and it is now time to consider the following:
have the OECD Report and its progeny achieved anything useful? There
have been two recent but contradictory answers to this question. On the
one hand, J.C. Sharman concluded in his book on tax havens that the
OECD effort was unsuccessful: [b]y 2002 the small [S]tate tax havens
had prevailed, and the campaign to regulate international tax competition
had failed.4 On the other hand, Vaughn James argued as early as 2002
that the policy driven by the OECD Report has robbed ... Caribbean
countries of their sovereign right to determine their tax and economic
policies.5
These two views obviously cannot both be true. Either the tax havens
have prevailed, or they have been crushed. Which view is correct? This
Article will argue in Parts I and II that, overall, the OECD effort has been
a success. The principal ground for this argument is data showing no de-
cline in individual or corporate tax revenues in OECD member countries
* Irwin I. Cohn Professor of Law and Director, International Tax LL.M. Program,
The University of Michigan Law School. I would like to thank Hugh Ault, Joe Guttentag,
Phil West, and participants in the Tax Competition workshop at the Universitd de
Montreal for their helpful comments.
1. COMM. ON Fisc. AFF., ORG. FOR ECON. Co-OPERATION & DEV., HARMFUL TAX
COMPETITION: AN EMERGING GLOBAL ISSUE (1998), available at http://www.oecd.org/
dataoecd/33/1/1904184.pdf [hereinafter OECD REPORT].
2. Id. 4.
3. See id. 90.
4. J.C. SHARMAN, HAVENS IN A STORM: THE STRUGGLE FOR GLOBAL TAX REGULA-
TION 1 (2006).
5. Vaughn E. James, Twenty-First Century Pirates of the Caribbean: How the Or-
ganization for Economic Cooperation and Development Robbed Fourteen CARICOM
Countries of Their Tax and Economic Policy Sovereignty, 34 U. MIAMI INTER-AM. L.
REv. 1, 2 (2002).](ViewImageLocal?handle=hein.journals/bjil34&div=30&collection=&method=preview&ext=.png&size=3)
What Is HeinOnline?
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most
The OECD Harmful Tax Competition Report: A Retrospective after a Decade
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most