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This paper examines corporate tax avoidance involving Dutch special purpose entities (SPEs), or shell companies. We use unique data of the SPEs including the origin and destination country of dividend, interest, and royalty flows passing the Netherlands. First, we present descriptive statistics of these flows which amount to 140 billion euro in 2016. Second, we collect national tax data on the corporate income tax and fiscal treatment of these flows. By combining tax parameters with bilateral flows, we can assess the potential tax gains for multinational enterprises using Dutch SPEs. We find massive tax savings for royalties when Dutch SPEs are used as an intermediate station compared to direct flows between the origin and destination country. We measure this tax gain at almost 3 billion euro in a single year. However, we do not find such tax savings for dividends and interest. We explain where we lack information and hence cannot measure possible tax gains. In regression analysis, controlling for country characteristics, we find that tax differentials partially explain the geographical patterns of income flows diverted through the Netherlands. This paper is one of the first using bilateral income flows as dependent variables instead of FDI stocks or flows. [ABSTRACT FROM AUTHOR]

Whether to increase taxes or cut spending is an important question with profound policy implications, especially as countries attempt to deal with the consequences of the COVID-19 pandemic. This study, therefore, investigated the relationship between revenues and spending in the Southern African Development Community (SADC), where concerns about rising debt and deficits were raised prior to the pandemic. A panel bootstrap Granger-causality technique was used to analyze annual frequency data covering the 1980–2018 period. To our best knowledge, this was the first study in Africa to simultaneously account for cross-country differences and cross-section dependence. The findings of the study have in-depth implications for fiscal policy and adjustments towards budgetary equilibria. The study found no evidence of causality between revenues and spending in eleven SADC member states, suggesting that to balance their respective budgets, governments in these countries can alter either spending or revenues, or both. However, in Botswana, we found evidence of the tax-spend hypothesis, implying that governments should consider altering revenues to eliminate budget imbalances. Finally, evidence of the spend-tax hypothesis was found in Mauritius and Mozambique, suggesting that past and current expenditures drive revenues in these countries. Accordingly, cutting spending would be an ideal policy recourse to deal with budgetary disequilibrium. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between China's changing economy and its global business tax diplomacy. Three trends dominate: China is becoming a net capital exporter, emerging as a major consumer market, and is home to digital giant firms including Baidu, Tencent and Alibaba. The resulting drive to promote both 'going out' and 'bringing in' foreign direct investment has led China to engage selectively and strategically with Western-led institutions. We show how China variously challenges, defends, and develops alternatives to global tax standards in three cases: global efforts to tackle corporate tax avoidance, bilateral tax treaty negotiations, and administrative tax cooperation. [ABSTRACT FROM AUTHOR]

India’s bilateral investment treaty (BIT) programme has undergone a complete overhaul ever since India was sued by multiple foreign investors before various investor-State dispute settlement (ISDS) tribunals. India unilaterally terminated all its BITs, adopted a new Model BIT, and is now negotiating new investment treaties with several countries like the European Union and Australia. Against this background, the parliamentary standing committee on external affairs has made some significant recommendations on India’s approach toward BITs. The parliamentary committee recognises the value of BITs for India to attract foreign investment inflows. This paper studies the critical recommendations of the parliamentary committee and concludes that India needs to revisit its Model BIT to strike a balance between investment protection and State’s right to regulate. This recalibration in India’s approach would be useful at a time when it is endeavouring to enter into investment treaties with important capital exporting countries to India. [ABSTRACT FROM AUTHOR]

The Covid-19 pandemic highlights the pressing need to address common challenges faced by all countries and, in particular, provide special support to developing countries through international cooperation. Taxation, in particular Value Added Tax (VAT), is a key area for strengthening international cooperation because of its critical role in financing the Covid-19 crisis and supporting global recovery. This paper proposes the adoption of VAT treaties based on two considerations. First, there exist, in the interplay between states' VAT laws, over-taxation and under-taxation that can be more effectively addressed by treaties than by unilateral state actions. Secondly, unlike income tax treaties, VAT treaties would distribute more benefits from cooperation to developing countries than to developed countries, leading to normatively attractive distributional consequences. The proposed model offers a new approach to taxing cross-border transactions under VAT and could form part of a coordinated response to a sustainable post-pandemic recovery. [ABSTRACT FROM AUTHOR]

The modern challenges of the banking and financial field have accentuated the rise of cross-border financial transactions. Specific developments in domestic financial markets, and in particular technological progress, have led to the need for international agreements on how international financial and banking activities should be conducted. For such agreements between states, however, there is a long way to go between accepting, initialing, acceding and ratifying the entry into force of a treaty. They range in scope from private cooperation agreements to international treaties signed by sovereign nations, which include clauses on dispute settlement mechanisms as well as conditions of execution. A modern category of such treaties includes clauses that regulate in a certain way certain aspects of the financial-banking field in close connection with international investments, such as the clause that includes the standards of the transfer of funds from the investment treaties. The research methods used for this study are comparative and quantitative, with specific advice to identify the most appropriate scientific solution, converging from the Kapstein approach (1994 - "international cooperation based on home country control") to modern approaches created by the emergence of new ones. financial-banking centers and from protection against economic crises. [ABSTRACT FROM AUTHOR]

In the wake of the financial crisis of 2007–2009, by means of a major Western state-led initiative in tax cooperation designed to eliminate tax evasion in the world, offshore financial centers were required to exchange information on bank accounts, first on request, then automatically. Even though all major offshore financial centers have agreed to the new tax standards, the emerging literature on global tax politics disagrees on their effectiveness. To make sense of these contrasting findings, I argue that we need to shift our focus to the diverse ways that targeted actors have responded to the new standards. I develop a typology of resistance strategies and show why state actors engage in one or the other strategy despite pressure from great powers. New tax treaty data, as well as archival and interview material in the matched cases of the Bahamas and Barbados demonstrate variance in the relationships between governments and the financial industry, and governments and international organizations, which in turn leads to the pursuit of different resistance strategies. Ultimately, by highlighting the heterogeneity of targeted actors' responses to global standards, the study has important implications for the literature on institutional emergence and design writ large. [ABSTRACT FROM AUTHOR]

Moving goods and services is much easier than moving labor and obstacles to migration represent the biggest difference between the wave of globalization we are experiencing and that which occurred more than a hundred years ago. Universally, the General Agreement on Trade in Services (GATS) is the only multilateral treaty that specifically deals with the admission of migrants for labor purposes. Relevantly, according to some estimates, elimination of immigration controls would more than double the world's real income. Despite the prospect of such significant welfare gains, migration is the most sensitive of all aspects of globalization, one of the most virulent political issues in international law and the unexplored frontier of globalization. Political realities largely explain the resistance, especially in wealthy countries, to liberalizing the flow of workers. [ABSTRACT FROM AUTHOR]

The OECD/G20 Inclusive Framework provided further clarity on the future of international tax reform by reaching a new agreement in October 2021. The release updates the Inclusive Framework's statement from July 2021 and elaborates on the structure of Pillars One and Two, which will serve to update international tax laws to reflect the fast-growing digital economy and implement and impose a new global minimum tax on multinational enterprises. [ABSTRACT FROM AUTHOR]