Two Accounts of International Tax Justice

2020 ◽  
Vol 33 (2) ◽  
pp. 317-339
Author(s):  
Ivan Ozai
Keyword(s):  
Developing Countries ◽  
Tax Competition ◽  
Income Tax ◽  
Capital Mobility ◽  
Institutional Design ◽  
Developing Economies ◽  
Host Countries ◽  
Cross Border ◽  
Relative Dependence ◽  
International Tax

The contemporary international tax regime has been increasingly criticized over the years from varied perspectives, particularly as to the unfairness it produces for developing countries. Some commentators argue it is unjust due to the lack of participation of developing countries in the policymaking process on an equal footing. Others suggest the international tax regime was designed by affluent countries to respond to self-interested goals. Some note that its current institutional design creates opportunities for tax competition and avoidance, which more seriously affect developing economies due to their relative dependence on corporate income tax and their greater vulnerability to capital mobility. Others specifically criticize how taxing rights, that is, the entitlement of countries to tax cross-border transactions, are currently allocated between home and host countries and how they disfavour capital-importing, developing countries.

Opening the capital account of developing countries: Some policy issues

2003 ◽  
Vol 53 (3) ◽  
pp. 245-270 ◽  
Author(s):  
D. Daianu ◽  
R. Vranceanu
Keyword(s):  
Developing Countries ◽  
Capital Mobility ◽  
Global Economy ◽  
Currency Crises ◽  
Developing Economies ◽  
Market Competition ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
System A ◽  
Building Market

In the late eighties, many developing countries followed the example of the most advanced countries and opened their capital account (K.A.) in an attempt to reap new gains from increased integration with the world economy. Currently, after the wave of financial and currency crises that hurt the global economy over the last decade, enthusiasm about K.A. liberalization has greatly faded. First, the relationship between development and capital account liberalization did not come out to be as solid as initially expected; second, the greater capital mobility has brought about new forms of financial instability. This paper points to some risks that might be associated with undifferentiated deregulation of international movements of capital in connection with developing economies. It argues in favor of proper sequencing: liberalization should proceed in parallel with progress when it comes to macroeconomic stability, building market competition and the creation of a sound, internal financial system. A separate section analyzes this issue in the special context of transition economies.

Taxing Cross-Border Services

2021 ◽  
Vol 22 (3) ◽  
Author(s):  
Andrés Moreno
Keyword(s):  
Developing Countries ◽  
Cross Border ◽  
Rigid Framework ◽  
International Tax

Many developing countries have been trying to expand in the last decades their taxing powers on cross-border services rendered by non-residents beyond the rigid framework of the current international tax regime. However, this expansion has been carried on unilaterally and sometimes in an unplanned manner. This contribution describes the Brazilian and Argentinian experiences and tries to extract some policy lessons therefrom.

Predatory FDI during economic crises: insights from outbound FDI from China and host country responses

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Arindam Das
Keyword(s):  
Developing Economies ◽  
Secondary Data ◽  
Political Agenda ◽  
Economic Downturn ◽  
Host Countries ◽  
Investment Policies ◽  
Content Type ◽  
Policy Responses ◽  
Cross Border ◽  
And Control

Purpose This paper aims to analyze outbound investments from China at the time of economic crisis caused due to the coronavirus (COVID-19) pandemic and how target valuation and the host country’s inbound investment policies influence the acquisition intents. As firms witness low valuations during an economic downturn, they become attractive targets for opportunistic buyers, who may be driven by motives beyond business and influenced by the home country’s political agenda. Such attempts are countered with the adoption of restrictive investment policies in host countries. Design/methodology/approach The study uses secondary data on cross-border acquisitions from China over the past year and compares the characteristics of these acquisitions with cross-border acquisitions of acquirers from other large developed and developing economies. Findings Statistical analyzes show that there are significant differences in the way acquirers from China pursue strategic asset seeking, creeping and control seeking acquisitions during the pandemic and the pre-pandemic period. This paper also observes that reduced valuation of the target, due to economic downturn or otherwise, result in greater propensity in strategic asset seeking acquisitions by Chinese acquirers. At the same time, adverse policies at host nations negatively influence the strategic asset seeking propensity of these acquirers. In addition, the premium in the valuation of target assets during the pandemic does not drop significantly when compared with that of the pre-pandemic period. Originality/value With the outbreak of COVID-19 and its concomitant economic impact across the globe, the study brings forwards insights on predatory foreign direct investment (FDI) and explores how policy responses in host countries can be comprehensive rather than disembedded and unilateral.

CAPITAL FLOW WAVES AND ECONOMIC GROWTH: EVIDENCE FROM ADVANCED AND DEVELOPING ECONOMIES

2019 ◽  
pp. 1-34
Author(s):  
SU WAH HLAING ◽  
MAKOTO KAKINAKA
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Capital Mobility ◽  
Developing Economies ◽  
Capital Flow ◽  
Capital Inflows ◽  
Policy Implications ◽  
Macroeconomic Conditions ◽  
Macroprudential Policies ◽  
Efficient Resource

There have been growing concerns that volatile international capital flows could harm macroeconomic conditions in a country, although capital mobility generally promotes efficient resource allocation. To understand the roles of gross capital inflows and outflows, this study examines the effects of extreme capital flow waves on economic growth in 164 developing and advanced economies. The main results show clear differences between them. Growth in advanced countries is insensitive to extreme capital flow waves, but for developing countries, sudden stops and retrenchments (sudden decreases in capital inflows and outflows) hurt growth, while surges (sudden increases in capital inflows) are positively associated with growth. The analysis indicates that developing economies are vulnerable to sharp decreases in both capital inflows and capital outflows. Our findings have policy implications for financial regulators, particularly in developing countries, indicating that they should pay more attention to macroprudential policies related to capital flow management aimed at stabilizing capital flow movements.

scholarly journals Tax sparing clauses as a policy instrument of developing countries: evidence from the Latin-American tax treaty network

2021 ◽  
Vol 4 (01) ◽  
Author(s):  
Aitor Navarro Ibarrola
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Latin American ◽  
Income Tax ◽  
Direct Investment ◽  
Home Country ◽  
Tax Incentives ◽  
Policy Instrument ◽  
Corporate Income Tax ◽  
Cross Border

Developing countries frequently grant corporate income tax incentives in order to attract foreign direct investment. To secure the effectiveness of these measures at a cross-border level, tax sparing clauses secure a notional credit at residence, meaning a discount on the taxes due even if no or lower taxes were paid at source. These clauses prevent the home country of the investor from taxing that income, allowing the investor to retain the tax spared by the host country. This contribution examines the rationale of tax sparing and conducts an examination of the issue from the perspective of the Latin-American tax treaty network – comprising more than 250 treaties – to draw relevant conclusions from the analysis of the specific clauses included in these agreements.

scholarly journals Cross-Border Portfolio Investment from Developing Economies and Top Major Partners, Using the Gravity Model

2018 ◽  
Vol 10 (11) ◽  
pp. 137
Author(s):  
Sahar Hassan Khayat ◽  
Samiha Hassan Khayyat
Keyword(s):  
Gravity Model ◽  
Bilateral Trade ◽  
Developing Economies ◽  
Positive Influence ◽  
Gdp Per Capita ◽  
Portfolio Investment ◽  
Host Countries ◽  
Data Set ◽  
Cross Border ◽  
Per Capita

The study has evaluated the volume of cross-border portfolio investment from developing economies and top major partners, using gravity model. Panel data set is used on bilateral gross cross-border investment flows between 37 developing countries and 79 host countries, which are the top five in the world from 2001 and 2012. The positive and significant coefficient on GDP per capita in a destination country can explain a significant part of Lucas paradox. It supported the reason why developing capital is invested outside the region. The results showed statistically insignificant effect of bilateral trade in lagged form on asset holdings. There is a high correlation between GDP per capita in source country and market capitalization of listed companies in the source countries. The significant positive coefficient of GDP per capita of source economies in OLS suggested that richer economies are major sources of portfolio investment Geographical proximity exerts a significant positive influence on the assets that investors may diversify their portfolios.

scholarly journals Corporate income tax reforms and international tax competition

2002 ◽  
Vol 17 (35) ◽  
pp. 449-495 ◽  
Author(s):  
M. P. Devereux ◽  
R. Griffith ◽  
A. Klemm
Keyword(s):  
Tax Competition ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Reforms ◽  
International Tax Competition ◽  
International Tax

Peter J. Montiel, Pierre-Richer Agenor, and Nadeem ul Haque. Informal Financial Markets in Developing Countries: A Macroeconomic Analysis. Published in the "Advances in Theoretical and Applied Economics" series edited by Homa Motamen-Scobie. Oxford: Blackwell. 1992. i-xi + 212 pp., including appendices. Hardbound. £40.00.

1993 ◽  
Vol 32 (3) ◽  
pp. 332-335
Author(s):  
Willem Van der Geest
Keyword(s):  
Developing Countries ◽  
Financial Markets ◽  
Foreign Exchange ◽  
Capital Mobility ◽  
Banking System ◽  
Exchange Rate Policy ◽  
Informal Markets ◽  
Financial Repression ◽  
Macroeconomic Analysis ◽  
Econometric Analyses

This volume reviews the nature and scope of informal financial markets in developing countries and elaborates on the theoretical and conceptual models which analyse 'financial repression' and other aspects of government intervention in financial markets. It also focuses on the consequences which the prevalence of informal financial markets in developing countries may have for monetary and exchange rate policy. In particular, it attempts to capture the functioning of informal, unregulated markets into macroeconomic models, working towards a general eqUilibrium model with informal financial markets. Two types of informal markets are analysed. The first are for informal lending at terms and conditions which differ greatly from those prevailing in the official banking system. The second are the 'parallel' markets for foreign exchange which tend to emerge in response to quantity restrictions on trade and administered allocation of foreign exchange to certain users at official rates, which are well below those on the parellel markets. The key question is whether these informal markets change the efficacy of monetary and credit policy-and, if they do, to what extent and in what direction? Two supporting appendices present econometric analyses of the efficiency of parallel currency markets and the degree of capital mobility in developing countries.

Sign in / Sign up

Export Citation Format

Share Document