International double taxation and tax discrimination are recurrent challenges in common markets. Double taxation arises when two states tax the same income, while tax discrimination occurs when comparable taxpayers or transactions are treated differently on prohibited grounds. Both impede cross-border economic activity. Within the Gulf Cooperation Council (GCC), primary law expressly prohibits tax discrimination but does not impose any obligation to grant relief from double taxation, nor is such relief addressed in secondary legislation. This has raised the question of whether the GCC’s tax anti-discrimination rule alone can ensure relief from juridical double taxation. A similar debate has long existed in the European Union. Although the Treaty on the Functioning of the European Union does not explicitly prohibit tax discrimination, the European Court of Justice has interpreted the European Union’s fundamental freedoms as prohibiting discriminatory tax treatment. According to the Court’s settled case law, the prohibition of tax discrimination under EU law is not sufficient, in itself, to require the elimination of double taxation in the absence of discriminatory treatment. Drawing on this jurisprudence, this article argues that the GCC’s tax anti-discrimination rule is insufficient to address all instances of double taxation and that coordinated secondary legislation provides a more effective solution.
Sarah Khaled Alsultan (Tue,) studied this question.