International tax arbitrage, tax evasion and interest parity conditions
AbstractUsing a finite-horizon general equilibrium model with uncertainty and money, we characterize situations where tax arbitrage opportunities may arise for internatioanl portfolio investors in an economy with heterogeneous capital income taxation when there is some scope to evade taxes on foreign capital income. We derive tax-modified uncovered interest parity conditions and forward raets similar to the no-tax ones, but augmented by tax-induced "risk-premium" terms.
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Bibliographic InfoArticle provided by Elsevier in its journal Research in Economics.
Volume (Year): 55 (2001)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/inca/622941
Other versions of this item:
- Strobel, F., 1998. "International Tax Arbitrage Tax Evasion amd Interest Parity Conditions," Discussion Papers 98-05, Department of Economics, University of Birmingham.
- F3 - International Economics - - International Finance
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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