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Tax treaties and the allocation of taxing rights with developing countries

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  • PAOLINI, Dimitri

    (Università di Sassari, CRENoS and DEIR; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; University of Luxembourg, CREA, Luxembourg)

  • PISTONE, Pasquale

    (University of Salerno and WU Vienna)

  • pulina, GIUSEPPE

    (Università di Cagliari and Sassari, CRENoS and DEIR)

  • ZAGLER, Martin

    (WU Vienna University of Economic and Business)

Abstract

Global income taxation in the country of residence is a legal dogma of international taxation. We question this dogma from the perspective of relations with developing countries from a legal and economic perspective, and make a modern and fair proposal for tax treaties. We will show under which conditions a developing and a developed country will voluntarily sign a tax treaty where information is exchanged truthfully and whether they should share revenues. Moreover, we will demonstrate how the conclusion of a tax treaty can assist in the implementation of a tax audit system.

Suggested Citation

  • PAOLINI, Dimitri & PISTONE, Pasquale & pulina, GIUSEPPE & ZAGLER, Martin, 2011. "Tax treaties and the allocation of taxing rights with developing countries," LIDAM Discussion Papers CORE 2011042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2011042
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    References listed on IDEAS

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    Cited by:

    1. Petr Janský & Jan Láznička & Miroslav Palanský, 2021. "Tax treaties worldwide: Estimating elasticities and revenue foregone," Review of International Economics, Wiley Blackwell, vol. 29(2), pages 359-401, May.
    2. Julia Braun & Martin Zagler, 2018. "The true art of the tax deal: Evidence on aid flows and bilateral double tax agreements," The World Economy, Wiley Blackwell, vol. 41(6), pages 1478-1507, June.
    3. Hearson, Martin, 2018. "When do developing countries negotiate away their corporate tax base?," LSE Research Online Documents on Economics 87762, London School of Economics and Political Science, LSE Library.
    4. Hearson, Martin, 2018. "Transnational expertise and the expansion of the international tax regime: imposing ‘acceptable’ standards," LSE Research Online Documents on Economics 88351, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    international corporate income taxation; tax treaties; revenue sharing; asymmetric information; uncertainty; locational decisions; principal-agent models;
    All these keywords.

    JEL classification:

    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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