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Tax treaties with developing countries and the allocation of taxing rights

Author

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  • Dimitri Paolini

    (Università di Sassari
    Université catholique de Louvain)

  • Pasquale Pistone

    (University of Salerno
    WU Vienna University of Economics and Business
    IBFD)

  • Giuseppe Pulina

    (University of Luxembourg)

  • Martin Zagler

    (WU Vienna University of Economics and Business
    UPO University of Eastern Piedmont)

Abstract

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

Suggested Citation

  • Dimitri Paolini & Pasquale Pistone & Giuseppe Pulina & Martin Zagler, 2016. "Tax treaties with developing countries and the allocation of taxing rights," European Journal of Law and Economics, Springer, vol. 42(3), pages 383-404, December.
  • Handle: RePEc:kap:ejlwec:v:42:y:2016:i:3:d:10.1007_s10657-014-9465-9
    DOI: 10.1007/s10657-014-9465-9
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    Cited by:

    1. 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.
    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. 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.
    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

    Developing countries; Tax treaties; Exchange of information; Revenue sharing; Cost sharing; International tax justice;
    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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