What Can Trade Teach Tax? Examining Reform Options for Art. 24 (Non-Discrimination) of the OECD Model

Abstract

Although international trade agreements contain broad non-discrimination provisions that are potentially applicable to tax measures, in general tax measures are carved out of trade agreements and are dealt with exclusively under bilateral income tax treaties. This paper examines the relationship between tax and trade agreements with respect to the protection against discrimination and suggests that trade and tax should remain separate because there is relatively little that trade can offer tax in terms of policy guidance or even inspiration with respect to income tax discrimination issues. As an alternative to subjecting income tax systems to the non-discrimination provisions of trade agreements, the paper discusses the possibility of certain limited changes to the Commentary on Art. 24 of the OECD Model, to expand the protection against discrimination.