Tax Policy and Investment Treaty Protection A Way to Reduce Risk of Investments (Part One)

Recently, President Xi Jinping called for reducing investment risks within countries of the Belt and Road Initiative (BRI). In this article, of which the second part will be published in a forthcoming issue of BRITJ, we aspire to respond to that call by focusing on one of overarching and yet vastly underexplored areas of high relevance for reducing risks of investments: the interplay between tax policy and investment treaty protection. Our claim is that a wise tax policy factors in the impact of investment protection standards under international investment agreements (IIAs) on tax measures . To this end, it is advisable that ministries responsible for tax policy cooperate with those in charge for developing investments whenever tax measures concern inbound or outbound investments. In parallel, “tax administrations could develop technical expertise with respect to IIA disciplines through closer interaction with government departments in charge of the negotiation of IIAs and the defence of ISDS cases and vice versa.