The institutional design of international double taxation avoidance
[Das Design der internationalen Institutionen zur Vermeidung von Doppelbesteuerung]
This article analyzes the institutional design of international double tax avoidance. The basic argument is that double tax avoidance exhibits the strategic structure of a coordination game with a distributive conflict. The distribution of tax revenues depends on the asymmetry of investment flows between treaty partners. Since investment flows are defined dyadically, bilateral bargaining can best accommodate countries’ concern for the distribution of tax revenues and other economic benefits connected to the tax base. Moreover, because there are no serious externality problems with bilateral agreement, this solution is also viable. At the same time, there is a need for a multilateral organization to disseminate information and shared practices in the form of a model convention that provides a focal point for bilateral negotiations. The strategic structure of a coordination game can also explain why the institutions of double tax avoidance do not have to be equipped with third-party enforcement capabilities. Instead, the Mutual Agreement Procedure (MAP) is interpreted as a device to deal with the fact that double tax agreements (DTAs) are incomplete contracts.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: ++49 - 30 - 25491 - 0
Fax: ++49 - 30 - 25491 - 684
Web page: http://www.wzb.eu/Email:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ronald B. Davies, 2004. "Tax Treaties and Foreign Direct Investment: Potential versus Performance," International Tax and Public Finance, Springer, vol. 11(6), pages 775-802, November.
- Chisik, Richard & Davies, Ronald B., 2004.
"Asymmetric FDI and tax-treaty bargaining: theory and evidence,"
Journal of Public Economics,
Elsevier, vol. 88(6), pages 1119-1148, June.
- Chisik, Richard & Ronald B. Davies, 2002. "Asymmetric FDI and Tax-Treaty Bargaining: Theory and Evidence," Royal Economic Society Annual Conference 2002 48, Royal Economic Society.
- Ron Davies & Richard Chisik, 2004. "Asymmetric FDI and Tax-Treaty Bargaining: Theory and Evidence," Econometric Society 2004 Latin American Meetings 64, Econometric Society.
- Richard Chisik & Ronald B. Davies, 2001. "Asymmetric FDI and Tax-Treaty Bargaining: Theory and Evidence"," University of Oregon Economics Department Working Papers 2001-2, University of Oregon Economics Department, revised 01 Jun 2002.
- Richard Chisik & Ronald B. Davies, 2010. "Asymmetric FDI and Tax-Treaty Bargaining: Theory and Evidence," Working Papers 020, Ryerson University, Department of Economics.
- John Whalley, 2001. "Puzzles Over International Taxation of Cross Border Flows of Capital Income," NBER Working Papers 8662, National Bureau of Economic Research, Inc.
- McIntyre, Michael J., 1993. "Guidelines for Taxing International Capital Flows: The Legal Perspective," National Tax Journal, National Tax Association, vol. 46(3), pages 315-21, September.
- David G. Hartman, 1982. "Tax Policy and Foreign Direct Investment in the United States," NBER Working Papers 0967, National Bureau of Economic Research, Inc.
- Sinn, H.W., 1990.
"Taxation And The Birth Of Foreign Subsidiaries,"
66, Princeton, Woodrow Wilson School - Discussion Paper.
- Koremenos, Barbara & Lipson, Charles & Snidal, Duncan, 2001. "The Rational Design of International Institutions," International Organization, Cambridge University Press, vol. 55(04), pages 761-799, September.
- Rixen, Thomas, 2008.
"The institutional Design of international double Taxation Avoidance,"
8322, University Library of Munich, Germany.
- Rixen, Thomas, 2008.
"The institutional design of international double taxation avoidance
[Das Design der internationalen Institutionen zur Vermeidung von Doppelbesteuerung]," Discussion Papers, Research Unit: Global Governance SP IV 2008-302, Social Science Research Center Berlin (WZB).
- Rixen, Thomas, 2008. "The institutional design of international double taxation avoidance
- Drezner, Daniel W., 2000. "Bargaining, Enforcement, and Multilateral Sanctions: When Is Cooperation Counterproductive?," International Organization, Cambridge University Press, vol. 54(01), pages 73-102, December.
- Hartman, David G., 1985. "Tax policy and foreign direct investment," Journal of Public Economics, Elsevier, vol. 26(1), pages 107-121, February.
- Abbott, Kenneth W. & Snidal, Duncan, 2000. "Hard and Soft Law in International Governance," International Organization, Cambridge University Press, vol. 54(03), pages 421-456, June.
When requesting a correction, please mention this item's handle: RePEc:zbw:wzbtci:spiv2008302. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.