International Tax Arbitrage Tax Evasion amd 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 InfoPaper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 98-05.
Length: 20 pages
Date of creation: 1998
Date of revision:
TAX EVASION ; ARBITRATION ; INTEREST RATE;
Other versions of this item:
- Strobel, Frank, 2001. "International tax arbitrage, tax evasion and interest parity conditions," Research in Economics, Elsevier, vol. 55(4), pages 413-427, December.
- F3 - International Economics - - International Finance
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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