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Identification of conduit jurisdictions and community structures in the withholding tax network

Author

Listed:
  • Tembo Nakamoto

    (Graduate School of Advanced Integrated Studies in Human Survivability)

  • Yuichi Ikeda

    (Graduate School of Advanced Integrated Studies in Human Survivability)

Abstract

Due to economic globalization, international tax avoidance has emerged as a well-known global issue. To contribute to providing the solution of international tax avoidance, we tried to investigate which part of the network is vulnerable. Specifically, focusing on treaty shopping, which is one of the international tax avoidance schemes, we attempt to find which jurisdictions are likely to be used for treaty shopping from the viewpoint of tax rates and reveal the relationships between jurisdictions used for treaty shopping and the others. For that purpose, based on withholding tax rates imposed on dividends, interest, and royalties, we produced the withholding tax network expressed as weighted graphs, computed the centralities and detected the communities. As a result, we identified the jurisdictions used for treaty shopping and pointed out that there are community structures. The results of our study suggested that fewer jurisdictions need to introduce more regulations for the prevention of treaty shopping worldwide.

Suggested Citation

  • Tembo Nakamoto & Yuichi Ikeda, 2018. "Identification of conduit jurisdictions and community structures in the withholding tax network," Evolutionary and Institutional Economics Review, Springer, vol. 15(2), pages 477-493, December.
    • Handle: RePEc:spr:eaiere:v:15:y:2018:i:2:d:10.1007_s40844-018-0111-z
    DOI: 10.1007/s40844-018-0111-z
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    References listed on IDEAS

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    1. Maarten van 't Riet & Arjan Lejour, 2014. "Ranking the Stars: Network Analysis of Bilateral Tax Treaties," CPB Discussion Paper 290.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Maarten van 't Riet & Arjan Lejour, 2014. "Ranking the Stars: Network Analysis of Bilateral Tax Treaties," CPB Discussion Paper 290, CPB Netherlands Bureau for Economic Policy Analysis.
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    Citations

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    Cited by:

    1. Tembo Nakamoto & Abhijit Chakraborty & Yuichi Ikeda, 2019. "Identification of Key Companies for International Profit Shifting in the Global Ownership Network," Papers 1904.12397, arXiv.org.
    2. Tembo Nakamoto & Odile Rouhban & Yuichi Ikeda, 2019. "Location-Sector Analysis of International Profit Shifting on a Multilayer Ownership-Tax Network," Papers 1904.09165, arXiv.org.
    3. Yuichi Ikeda, 2019. "Special feature: Econophysics 2017: synergetic fusion of econophysics and other fields of science—Part II," Evolutionary and Institutional Economics Review, Springer, vol. 16(1), pages 181-182, June.
    4. Lejour, Arjan, 2021. "The Role of Conduit Countries and Tax Havens in Corporate Tax Avoidance," Other publications TiSEM e0530ca3-b3b3-4aca-826b-d, Tilburg University, School of Economics and Management.
    5. Tembo Nakamoto & Odile Rouhban & Yuichi Ikeda, 2020. "Location-sector analysis of international profit shifting on a multilayer ownership-tax network," Evolutionary and Institutional Economics Review, Springer, vol. 17(1), pages 219-241, January.
    6. Lejour, Arjan, 2021. "The Role of Conduit Countries and Tax Havens in Corporate Tax Avoidance," Discussion Paper 2021-014, Tilburg University, Center for Economic Research.

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    More about this item

    Keywords

    International taxation; International tax avoidance; Network analysis;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • F69 - International Economics - - Economic Impacts of Globalization - - - Other

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