ABSTRACT
Tax policy experts, like Vito Tanzi, often lament the lack of international cooperation in taxation, but it does exist and it has a fairly long history.1 As early as the nineteenth century, states began to conclude bilateral tax treaties, codifying common rules for sharing transnational tax bases. These helped the contracting parties to keep their tax systems separate even in cases where they participated in the same tax base. As long as transnational tax bases were few in number and fiscally unimportant, the number of tax treaties remained low: by the mid-1950s only about 100 treaties had been concluded worldwide. With the advent of globalization, however, the treaty network began to expand. Today, it connects virtually all OECD member states to each other and extends to almost all other countries worldwide, with the total number of treaties approaching 2300. Why the tax treaty regime is still organized bilaterally, when, as many argue, a multilateral regime would be much more efficient and effective, is in itself an interesting question.2 Still, there can be no doubt that the spread of this regime is a reaction to the increased coordination needs of national tax administrations in a globalized economy.3
