More and more countries are coordinating at the international level to implement taxation measures to counter the problem of tax avoidance by multinational corporations (MNCs). This has led to increasing internalization of taxation measures, which, in turn, will lead to greater normative dialogue between international taxation and other branches of public international law such as international investment law (IIL). This paper argues that MNCs and foreign investors have not shied from using the IIL framework to challenge sovereign taxation measures of States before investor-State dispute settlement (ISDS) tribunals. These challenges, part of the increasing judicialization of international tax measures, have generated a rich body of case law. While ISDS tribunals are generally deferential towards State’s sovereign right to tax, they clearly recognize certain limits on this sovereign power. ISDS tribunals have not hesitated from laying down principles where abuse of taxation powers or imposition of taxes that are not reasonable or proportionate have been held to be inconsistent with the country’s investment treaty obligations. Even carving-out taxation measures from the ambit of the investment treaty are no surety that an ISDS tribunal will not exercise jurisdiction over such tax measures especially when they are not exercised in a bona fide manner. As countries find ways to tax MNCs to counter the problem of tax avoidance, they should keep these important jurisprudential principles in mind.