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Emergence of cross-border taxation and firm behaviour

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  • Goyal, Ashima

Abstract

The chapter discusses the evolution of Base Erosion and Profit Shifting (BEPS) from an emerging market (EM) perspective. It shows how treaties meant to prevent double taxation were used for double non-taxation and the problem was especially severe in EMs. It presents evidence of BEPS in India using firm level panel data. Since one country acting alone can frighten away foreign capital, global co-ordination is necessary. This makes BEPS one of the most productive initiatives G-20 has taken up. It aims to build global norms and agreements to ensure that taxes are paid where profit is earned. India should reform its corporate tax and regimes and bilateral investment treaties in line with international developments even while simplifying them and making them more business friendly.

Suggested Citation

  • Goyal, Ashima, 2015. "Emergence of cross-border taxation and firm behaviour," MPRA Paper 79819, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:79819
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    File URL: https://mpra.ub.uni-muenchen.de/80042/1/MPRA_paper_79819.pdf
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    References listed on IDEAS

    as
    1. Gabriel Zucman, 2014. "Taxing across Borders: Tracking Personal Wealth and Corporate Profits," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 121-148, Fall.
    2. Anca D. Cristea & Daniel X. Nguyen, 2016. "Transfer Pricing by Multinational Firms: New Evidence from Foreign Firm Ownerships," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 170-202, August.
    3. Huizinga, Harry & Laeven, Luc, 2008. "International profit shifting within multinationals: A multi-country perspective," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1164-1182, June.
    4. Rao, R. Kavita & Sengupta, D.P., 2014. "Action Plan on Base Erosion and Profit Shifting: An Indian Perspective," Working Papers 14/133, National Institute of Public Finance and Policy.
    5. James R. Hines & Eric M. Rice, 1994. "Fiscal Paradise: Foreign Tax Havens and American Business," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 149-182.
    6. Mario Mansour & Michael Keen, 2009. "Revenue Mobilization in Sub-Saharan Africa; Challenges from Globalization," IMF Working Papers 09/157, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Base Erosion and Profit Shifting (BEPS); emerging market; firm panel data;

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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