Manal Corwin

The luncheon address by Ms. Manal Corwin offered a wide-ranging and substantive reflection on the evolving landscape of international tax policy, the pressures reshaping tax cooperation, and the future architecture of tax certainty. Speaking virtually, she began by acknowledging that although she could not attend in person due to competing commitments in Paris, she greatly valued the opportunity to contribute to a dialogue that has long shaped international tax thinking. Her remarks were situated against the backdrop of an increasingly disrupted and politically fragmented global environment, conditions that, she emphasised, have always played a decisive role in driving the trajectory of international tax reform. Corwin opened with three overarching observations designed to frame the remainder of her address. First, she reminded the audience that international tax rules do not evolve in a vacuum; their development has historically been propelled by disruptive political and conomic events. From the post-financial crisis transparency agenda to the early origins of tax cooperation in the mid-twentieth century, major shocks have consistently catalysed new multilateral instruments. Today’s pressures, such as pandemic recovery, inflation, geopolitical conflict, commodity shocks, and heightened fiscal needs are continuing that pattern, compelling states to revisit the balance between sovereignty, competitiveness, and cooperation.

Her second observation flowed naturally from the first: international tax cooperation is indispensable to global investment and trade. Tax systems influence capital allocation, innovation, and business location decisions. Certainty in treaty interpretation, stable dispute resolution frameworks, and predictable administrative practice are therefore preconditions for sustained cross-border investment. As the global environment becomes more volatile, the demand for tax certainty grows correspondingly more acute.

Third, Corwin emphasised that the foundational logic of tax cooperation has not changed in decades. Multinational enterprises will inevitably be exposed to multiple sovereign tax systems, and absent coordinated rules, double taxation and systemic uncertainty will hinder investment and erode domestic tax bases. The stakes today, she stressed, are higher than they have ever been. The need to preserve a stable international system through treaties, transfer pricing guidelines, and transparency standards is therefore pressing and non-negotiable. From this conceptual foundation, she turned to the OECD’s stewardship role. The OECD Model Tax Convention, she noted, has served as the global benchmark for over fifty years; it undergirds more than 3,500 bilateral tax treaties and remains central to treaty negotiation and interpretation worldwide. Recent updates, including revisions to the Article 5 commentary on permanent establishments, an optional alternative provision for natural-resource-related activities, and enhancements linked to financial transactions under BEPS Action 4 reflect the OECD’s commitment to adapting longstanding instruments to modern ways of doing business, including remote work and digitalised operations.

Parallel updates to Article 9 and continuous refinement of the OECD Transfer Pricing Guidelines demonstrate the same adaptive impulse. With more than ninety jurisdictions now applying the OECD Guidelines, they have become a global stabilising force essential for preventing disputes, aligning outcomes with value creation, and ensuring that tax administration remains responsive to evolving business models.

Corwin then shifted to the BEPS project and the evolving two-pillar solution. Minimum standards adopted under BEPS have strengthened treaty integrity and reduced harmful tax practices. She highlighted recent data demonstrating the real-world effects of these reforms: profit-to-employee ratios for MNEs have fallen by twenty-seven per cent, suggesting far greater alignment between economic substance and profit allocation. Sensitivity of profit location to statutory tax rates has also declined sharply, indicating that profit shifting has reduced. Yet she acknowledged that more work remains, particularly to ensure that developing countries benefit equitably from the BEPS framework.

Turning to Pillar Two, Corwin recalled that the United States had been the first jurisdiction to implement a minimum tax in 2017. Today, more than sixty-five jurisdictions have legislated or are in the process of legislating a global minimum tax, including across Europe, Canada, and parts of the Asia-Pacific. Negotiations on the future of Pillar Two, especially the “side-by-side” arrangement discussed at the Inclusive Framework meeting in South Africa, represent an important attempt to stabilise the emerging system. These discussions intensified through regular technical and political engagement. They seek to preserve the benefits already achieved, ensure a level playing field, examine potential retaliatory risks (particularly in light of U.S. concerns), and frame the global minimum tax in a way that maintains competitiveness while reducing the incentive for profit shifting.

Certainty and simplification formed a central theme in the latter part of her remarks. Corwin underscored that tax certainty remains a priority throughout the OECD’s work, from MAP enhancements to cooperative compliance programmes such as ICAP. She highlighted concerns that access to MAP is not consistently available across jurisdictions and noted that the OECD has recently convened senior tax commissioners and stakeholders to deepen commitments to dispute prevention and administrative simplification. A newly published OECD report on simplicity and growth outlines a framework for reducing the inherent complexities of international rules and identifies opportunities where multilateral action could meaningfully lower compliance burdens.

Looking toward the future of international tax cooperation beyond the two-pillar solution, Corwin outlined two emerging areas of inquiry. First, the interaction of tax policy with the digitalisation of work, particularly the tax implications of mobility, talent attraction, and new labour models require modernised rules. Work is underway to scope these issues, with a public consultation scheduled for January 26. Second, the relationship between tax policy, inequality, and economic growth has resurfaced as a topic of broad interest. While perspectives differ, she observed an increasing convergence around the need for evidence-based analysis before evaluating potential solutions. Both themes are expected to feature prominently in upcoming meetings of the Inclusive Framework, including deliberations in March.

Corwin closed with three concluding reflections. International cooperation remains essential for investment, stability, and domestic revenue protection. Legacy instruments such as treaties, transfer pricing guidelines, and transparency standards were built on assumptions that have changed materially; cooperation must evolve accordingly. And finally, failure to adapt will not prevent unilateral actions; rather, it risks fragmentation, double taxation, and diminished certainty. The OECD’s task, she emphasised, is to guide jurisdictions toward effective, coordinated solutions that preserve tax bases, promote sustainable growth, and maintain the legitimacy of the international tax architecture.

The address ended on a note of shared responsibility: practitioners, governments, and international organisations must remain committed to the principles that have anchored international tax cooperation for decades. In a global environment marked by volatility and rapid transformation, principles of predictability, coordination, stability and fairness are more important than ever.