Contribution to the to UN INC on the Protocol on Dispute Prevention and Resolution

The BMG has produced comments to the public consultation on the Issue Note of Workstream III negotiating the protocol on dispute prevention and resolution.

The increasing complexity of cross-border transactions has led to a surge in international tax disputes, arising in multiple forums—including mutual agreement procedures (MAPs), investor-state dispute settlement (ISDS), and WTO adjudication. While MAPs under tax treaties aim to resolve double taxation conflicts, they have proven ineffective, particularly for developing countries. Binding arbitration, introduced under the OECD’s Multilateral Instrument (MLI), remains unpopular among developing nations due to sovereignty concerns, with few cases actually proceeding to arbitration. Meanwhile, ISDS claims—constituting 15% of known cases (2000–2021)—pose significant risks, as seen in high-value awards like “Yukos v. Russia” ($50 billion). 

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Unitary Taxation, Digital EconomyBEPS Monitoring Groupdispute resolution, double tax treaties, dispute preventionComment
Contribution to the to UN INC on the Protocol on Taxation of Cross Border Services

The BMG has produced comments to the public consultation on the Issue Note of Workstream II negotiating the protocol addressing the tax challenges of the digitalization of the economy.

The taxation of cross-border services highlights critical gaps in current international tax rules. Services, increasingly central to economic growth, often involve minimal physical presence in market jurisdictions, undermining source-based taxation and favoring non-resident providers. This imbalance discourages local service sector development while enabling multinational enterprises (MNEs) to exploit "double non-taxation" through low-tax affiliates. A new paradigm is needed—one that fairly allocates taxing rights based on real economic activity rather than outdated physical presence tests. 

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Digital Economy, Unitary TaxationBEPS Monitoring GroupUN framework convention, taxation of servicesComment