Tax discrimination in international trade in services

The World Trade Organisation recognised the important role of services in the global economy by adopting the General Agreement on Trade in Services (GATS). The GATS largely carves out direct taxation and delegates the discipline over differential direct tax treatment to bilateral tax treaties, most of which are patterned on the Model developed by the Organisation for Economic Cooperation and Development (OECD Model). This thesis evaluates the effect of such an arrangement on cross-border service suppliers by analysing and comparing the meaning of non-discrimination under the GATS and the OECD Model. The study concludes that the existing arrangement can potentially result in discriminatory tax treatment of cross-border service providers, thus creating a trade barrier which is largely ignored under the GATS and tax treaties based on the OECD Model.