Income Tax Discrimination Against International Commerce

Abstract

Taxation and trade are governed by two very different sets of international agreements. The bilateral tax treaties, which originated in the 1920s, do not, for example, contain the rule-oriented dispute-settlement procedures of the multinational trade treaties, which have developed since World War II. In this article, Professor Warren analyzes the constraints imposed by the two sets of agreements on a country's freedom to use its income tax to discriminate against international commerce. His principal conclusions are that the current distinction between permissible and impermissible discrimination is incoherent and that the pre-World War II international tax regime is in need of fundamental reexamination.