Treaties that Tax: Legal Feasibility and Policy Implications for the UN Framework Convention

This article explores whether international treaties can directly create taxing rights, challenging the traditional view that treaties merely limit domestic tax jurisdiction. Focusing on the ongoing negotiations of the UN Framework Convention on International Tax Cooperation, it examines the legal feasibility and policy desirability of embedding charge-to-tax provisions in tax treaties. The analysis considers the interaction between international and domestic legal systems, including monist and dualist traditions, and different approaches to direct applicability. It concludes that international law poses no barrier to this approach, but domestic requirements related to direct applicability and constitutional nuances (e.g. legality) should be carefully considered. From a policy standpoint, a flexible adoption of this proposition could, on the one hand, increase negotiation challenges, while, on the other hand, enhancing the simplicity and coherence of the final outcome.