Mediating Power in Cross-Border Tax Dispute Resolution

In tax literature, mediation is often considered as an effective instrument for addressing two major problems that exist in international tax dispute resolution, specifically, states’ concerns regarding the preservation of their sovereignty and the insufficient involvement of taxpayers. While mediation can provide for a participation of all parties in the dispute resolution process, the parties’ ability to elaborate a solution in accordance with their own interests may be impaired due to an unequal distribution of negotiation power between the parties. Based on the authors’ experience in international tax law as well as civil and commercial mediation, this article discusses power relations in and their impact on mediation in tax-disputes.