Christian Aid, on June 9, called the G7 leaders’ recent expression of support for mandatory binding arbitration in multinational tax disputes “deeply troubling,” stating that the mechanism could further harm poor countries.
The NGO, which works to eradicate poverty, was referring to a joint declaration issued June 8 where the G7 nations expressed their “commitment to establish binding mandatory arbitration to ensure that the risk of double taxation does not act as a barrier to cross-border trade and investment.” The G7 also said it supported OECD efforts to include arbitration in its work on the base erosion profit shifting (BEPS) project.
“Not content with failing adequately to engage developing countries in the process of international reform of the rules on taxing multinational companies, it now seems that the G7 is keen to tell developing countries that they should also forfeit all power over how the new rules should be applied,” said Joseph Stead, Christian Aid’s Senior Adviser on Economic Justice.
Stead said that any new system of mandatory binding arbitration should be designed with the the full participation of poor countries, and must be simple, transparent and affordable.
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