The Origin of Non-discrimination in Tax Conventions

We found that the non-discrimination principle in tax conventions has its origin in the discussion of the Economic Committee of the League of Nations. Until recently, there has been very little research on the origin of the principle. Some commentators argue that the principle might conflict with the national treatment and the most-favored nation treatment. Especially the researchers of international economic law have a tendency to look down on the non-discrimination principle in tax conventions. According to them, its protection of taxpayers is not sufficient when compared with the protection NT and MFN in investment treaties affords investors. However, the non-discrimination principle itself is originally based on national treatment. The discussion by the Economic Committee had a substantial influence on the introduction of the “no business income taxation without PE” principle. The non-discrimination principle, especially that of PE, is a corollary of the principle.