The Role of Tax Treaties in Facilitating Development and Protecting the Tax Base

Lang, Michael; Owens, Jeffrey

doi:10.2139/ssrn.2398438

Cited by 19 publications

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“…Several reasons have been brought forward. Most prominently, it has been argued that developing countries expect increased capital inflows after the signature of DTAs (e.g., Lang & Owens, 2014). Empirical evidence as to whether DTAs indeed lead to higher investment flows is, however, far from conclusive 1 A multilateral instrument for the streamlining of DTAs has recently been proposed by the OECD in the framework of the Base Erosion and Profit Shifting (BEPS) project.…”

Section: Introductionmentioning

confidence: 99%

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The true art of the tax deal: Evidence on aid flows and bilateral double tax agreements

Braun

Zagler

2018

World Economy

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Of a total of 2,976 double tax agreements (DTAs), some 60% are signed between a developing and a developed economy. As DTAs shift taxing rights from capital‐importing to capital‐exporting countries, the latter inherently benefit more from the agreements. In this paper, we argue that capital exporters use foreign aid to incite capital importers into signing DTAs. We demonstrate in a theoretical model that in a deal, one country does not trump the other, but that the deal must be mutually beneficial. In the case of an asymmetric DTA, this requires compensation from the capital‐exporting country to the capital‐importing country. Examining DTAs that are signed between donor and recipient countries between 1991 and 2012, and using a fixed effects Poisson model, we find that bilateral foreign aid commitments increase by 22% in the year of the signature of a DTA. Evaluated at the sample mean, this translates into around US$ six million additional aid commitments in a DTA signatory year.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The true art of the tax deal: Evidence on aid flows and bilateral double tax agreements

Braun

Zagler

2018

World Economy

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“…As the example of hybrids shows, closing loopholes involving differences between national laws entails closer coordination of both law and policy. The conflict is exacerbated when a government decides 13 Some commentators still continue to emphasise this perspective, see, for example, Lang and Owens (2014); others argue that prevention of double taxation can adequately be ensured through domestic law, while retaining policy flexibility; the lock-in provided by tax treaties might at best be justified as a commitment device to reassure foreign investors, but the evidence on the effect of tax treaties on investment is at best mixed (Brooks and Krever 2015, and, for a case study, Hearson and Kangave 2016).…”

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Taxing Multinational Enterprises as Unitary Firms

Picciotto

2016

SSRN Journal

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The author of this paper grants to the IDS and the ICTD a perpetual, irrevocable, worldwide, royalty-free, non-exclusive licence, or sublicence, to reproduce, communicate to the public, use, adapt, publish, distribute, display and transmit the Work in any and all media, and to sublicense others (including the Crown) to reproduce, communicate to the public, use, adapt, publish, distribute, display and transmit the Work in any and all media, for non-commercial purposes and with appropriate credit being given to the author and ICTD funders.

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“…As such awareness continues to deepen and evolve one possible outcome may be that such theoretical concepts as inter-nation equity (fair international sharing arrangements) may become more important 26 . At present, however, as Lang and Owens (2013) note, the international tax regime falls far short of satisfying any conceivable distributional goal.…”

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confidence: 99%

Reforming International Taxation: Is the Process the Real Product?

Bird¹

2016

HPE-RPE

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Reforming international taxation -how national tax systems interact with each other-is an issue that is always technically complex, often economically significant, and sometimes politically explosive. Some expect major changes in international taxation in the near future but no one yet knows what changes will be made or when, how, and how effectively they might be implemented. Instead of speculating about such matters, this paper considers the process by which countries are attempting to reform international taxation problems, essentially through complex technical and political negotiations intended to produce an improved set of "soft" law arrangements, adherence to which will, as in the present system, be essentially voluntary. The current process, although under the aegis of the OECD, is considerably more inclusive than earlier negotiations on international taxation, which were largely between developed countries that were predominantly capital exporters. Greater inclusivity may make negotiations more difficult to conclude successfully but it may also result in a system that will be more widely accepted as fair. Moreover, experience gained through the present prolonged and intensive negotiations on international taxation may perhaps suggest a more fruitful approach to dealing with such other global public goods problems as climate change.

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The Role of Tax Treaties in Facilitating Development and Protecting the Tax Base

Cited by 19 publications

References 0 publications

The true art of the tax deal: Evidence on aid flows and bilateral double tax agreements

The true art of the tax deal: Evidence on aid flows and bilateral double tax agreements

Taxing Multinational Enterprises as Unitary Firms

Reforming International Taxation: Is the Process the Real Product?

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