Justice Davies of the Federal Court spoke of a paradigm shift from domestic tax laws to internationally recognised tax measures at The Tax Institute’s 2020 Financial Services Taxation Conference in Melbourne, and how this affects the issue of tax stability. Relevant measures include, for example, the hybrid mismatch rules, the diverted profits tax (DPT), the multinational anti-avoidance law (the MAAL) and the multilateral instrument (the MLI) and its impact on double tax agreements (DTAs). These would lead to a multitude of issues including:
- lack of consistency for internationally recognized tax measures across jurisdictions
- domestic tax laws of different jurisdictions can differ
- treaty interpretation, and
- integration of soft law including OECD materials (eg transfer pricing guidelines and the Model Tax Convention) and the MLI.