Evaluating the implications of changes promoted by the G20
in partnership with WU Global Tax Policy Center
Session Type
Room number
WIF Virtual Platform, room 8
Contact Email
20 October 2021
15:30 - 17:30 Europe/Zurich

Digitalization has transformed the ways of doing business leading to greater mobility of capital and labour. These changes have prompted a reform in the area of international tax that is likely to have wider implications for investment, yet to be fully understood.

On 1 July 2021 the Inclusive Framework on Base Erosion and Profit Shifting agreed on a two-pillar solution to address the tax challenges arising from the digitalization of the economy that was endorsed by G20 leaders in June 2021. The second pillar of this solution includes the option for countries to introduce an effective minimum tax rate of at least 15% on the income of a multinational enterprise (MNE), signalling an intention, at least at the multilateral level, to set a floor for international tax competition. The investment and tax communities must now engage in a debate on whether it remains desirable and feasible for countries, particularly developing countries, to continue to offer tax-based investment incentives. This may now require a paradigm shift in what features of the system countries should continue to compete on.

As the international discourse on the future of taxation has gained momentum, it is an appropriate time to discuss the interactions between tax and investment since both communities are undergoing an in-depth review of the approaches embedded in the respective agreements. The discussion aims to stimulate the interaction between, in particular, tax policymakers and international investment agreement (IIA) negotiators. The joint expertise of these two policy communities could lead to a greater coherence between tax and investment policymaking that could then be connected to discourse on trade.

The session is structured in two parts. The first part of the session will focus on how the changing tax landscape may have an impact on the design and use of tax incentives to attract investment, especially to developing countries. The second part of the session will focus on the overlaps in the respective frameworks for IIAs and tax treaties and the potential for an increased number of tax-related investor–State dispute settlements if international tax reform is realized.

Panel I

  • How, in this new tax environment, will countries, especially developing countries, compete for investment? What will be the broader impact on their industrial policy?
  • How will MNEs react to limitations in the use of tax incentives?
  • What will be the impact on overall FDI flows?
  • What will be the impact on tax revenues for developing countries?

Panel II

  • What do tax policymakers need to know about the operation of IIAs and what do investment policymakers need to know about the operation of tax treaties?
  • How can we achieve greater consistency in the way taxes are dealt with within IIAs and tax treaties, particularly in the area of dispute settlements?


Head, Tax Policy and Statistics Division, Organization for Economic Co-operation and Development
Professor Emerita of Management, Mays Business School of Texas A&M
Deputy Director, Fiscal Affairs Department, International Monetary Fund
Group Head of Tax, Anglo-American
Policy and Advocacy Manager, Tax, European Network on Debt and Development
Executive Secretary, African Tax Administration Forum
Professor, School of Law, City University of Hong Kong
Head of the International Tax Legislation Department of the Revenue Administration, Ministry of Finance, Chile
Former Chairperson Central Board of Direct Taxes, India
Chief of International Tax Cooperation, Financing for Development Office, United Nations Department of Economic and Social Affairs


Head, Investment Research Branch, UNCTAD
Director, WU Global Tax Policy Center, Institute for Austrian and International Tax Law, Vienna University of Economics and Business