Type and Duration
FFF-Förderprojekt, November 2024 until January 2025Coordinator
Business Management Taxation & Tax LawMain Research
Wealth ManagementDescription
This project aims to analyse the current international tax architecture, focusing on its role in assessing the need for reform and proposing new international tax standards. The growing interest in addressing issues such as the (re)allocation of taxing rights, the taxation of the digital economy, substance as a means of conferring tax residency, and more, has proven to be a catalyst for rethinking the approach to governance in international tax matters. The study examines the governance challenges within this international tax framework and asks whether OECD-led institutions or the newly established United Nations Tax Framework Convention can bring greater fairness and inclusiveness to the decision-making process. A key concern in this regard is whether proposed international initiatives infringe on the sovereignty of countries to regulate their own tax jurisdictions, or whether these standards should be treated as non-binding soft law. Moreover, this project will also explore the representation of developing and low-income countries in the discussion of international tax architecture and argue for their greater involvement in the formulation of new proposals. In addition, the project addresses the challenges associated with the decisions of taxpayers to relocate, highlighting the need for effective implementation of base erosion and profit shifting (BEPS) measures and appropriate allocation of taxing rights to jurisdictions where value is created. Furthermore, the project analyses the impact of these international tax initiatives on Liechtenstein, how the country should respond and its potential role in influencing global tax policy decisions, aiming to highlight the increasing role of regional and national concerns for fairness and equity in decision-making processes that respect the interests of all countries, including small but economically significant jurisdictions such as Liechtenstein.Practical Application
Taxation, as a fundamental mechanism of governance, is integral to ensuring societal welfare, facilitating sustainable economic growth, and maintaining the functionality of societal systems. By responding to developments in global tax matters, this project establishes a link between international tax reforms and their region-specific socio-economic implications. The primary objective of this research is to assess the potential outcomes of a new global tax leadership, particularly in the context of ongoing initiatives such as the Global Corporate Minimum Tax and new proposals such as the Global Minimum Wealth Tax. A region-specific analysis of these international tax framework changes is essential for evaluating their implications for societal welfare at jurisdictional level. By addressing these issues, the project aims to provide insights for policymakers, enabling informed decision-making to align national tax systems with evolving global standards while advancing sustainability and societal well-being.Reference to Liechtenstein
Liechtenstein, like many European countries, has demonstrated cooperation in adopting and implementing key international tax initiatives, including the exchange of tax information, the elimination of harmful tax practices, and enforcement of the four OECD BEPS Minimum Standards. Despite its proactive engagement with these reforms, Liechtenstein, along with the other European countries, voted against the recent UN Tax Framework Convention proposing a shift of global tax leadership to UN bodies. Nevertheless, Liechtenstein advocates for a more inclusive, effective, and equitable international tax agenda, while emphasizing the importance of preserving the significant progress achieved under the OECD leadership. This research project situates itself within this context, offering a critical evaluation of how international tax developments may impact Liechtenstein and at the same time, how Liechtenstein's approach to global tax governance aligns with broader international trends. By examining Liechtenstein's stance and its implications for regional and global tax policymaking, the project contributes to the understanding of how small but economically significant jurisdictions can navigate complex global tax dynamics.Keywords
Tax co-operation, International Tax Architecture
