scholarly journals Treasure Islands

2010 ◽  
Vol 24 (4) ◽  
pp. 103-126 ◽  
Author(s):  
James R Hines
Keyword(s):  
Tax Competition ◽  
The United States ◽  
Economic Effects ◽  
Tax Rates ◽  
Financial Systems ◽  
Tax Havens ◽  
Regulatory Policies ◽  
International Tax Competition ◽  
Tax Haven ◽  
Effective Operation

In movies and novels, tax havens are often settings for shady international deals; in practice, they are rather less flashy. Tax havens, also known as “offshore financial centers” or “international financial centers,” are countries and territories that offer low tax rates and favorable regulatory policies to foreign investors. For example, tax havens typically tax inbound investment at zero or very low rates and further encourage investment with telecommunications and transportation facilities, other business infrastructure, favorable legal environments, and limited bureaucratic hurdles to starting new firms. Tax havens are small; most are islands; all but a few have populations below one million; and they have above-average incomes. The United States and other higher-tax countries frequently express concerns over how tax havens may affect their economies. Do they erode domestic tax collections; attract economic activity away from higher-tax countries; facilitate criminal activities; or reduce the transparency of financial accounts and so impede the smooth operation and regulation of legal and financial systems around the world. Do they contribute to excessive international tax competition? These concerns are plausible, albeit often founded on anecdotal rather than systematic evidence. Yet tax haven policies may also benefit other economies and even facilitate the effective operation of the tax systems of other countries. This paper evaluates evidence of the economic effects of tax havens.

International Tax Competition and Its Reflections in Turkey

2016 ◽  
pp. 176-200
Author(s):  
Semih N. Öz
Keyword(s):  
Tax Competition ◽  
Transfer Pricing ◽  
Fiscal Policies ◽  
Tax Rates ◽  
Tax Havens ◽  
International Tax Competition ◽  
Income Tax Law ◽  
International Tax ◽  
The Government ◽  
Defensive Measures

International tax competition has been significantly increased since 1980s as a result of liberalized financial and fiscal policies, while this leads sovereign nations faced budgetary deficit problems and public finance related considerations. This paper aims to analyze how Turkish tax system is affected by international tax competition, services submitted by tax havens and facilities used by multinationals. In 2006, a new Corporate Income Tax Law was introduced in Turkey. One of its purposes is to combat against harmful tax competition and therefore it covered defensive measures such as controlled foreign company (CFC), thin capitalization rule and transfer pricing regulation, to prevent companies from leaving their income abroad. This study aims to analyze effects of international tax competition in Turkey whether there are change in tax rates, tax structure, and tax revenue; and how the government respond it, as a beneficiary; or, a loser.

scholarly journals Navigating Disruption: The Politics of Business Tax Reform as Two-Level Game

2019 ◽  
pp. 667-692
Author(s):  
Geoffrey Hale
Keyword(s):  
Open Economy ◽  
Tax Competition ◽  
Tax Reform ◽  
Domestic Politics ◽  
The United States ◽  
International Investment ◽  
Political Commitment ◽  
International Tax Competition ◽  
Business Tax ◽  
International Tax

The author addresses the politics of business taxation and international tax competition as an interactive series of two- (and sometimes multi-) level games embedded in broader debates over international competition for investment and the distribution of fiscal costs and benefits within Canada. Drawing on several international relations theories (neo-institutionalist, public choice, and realist), the author explores the evolution of Canada's business tax system in relation to the evolving systems of other major competitors for international investment, especially the United States--changes that are occurring as part of a wider effort to balance and integrate competing and overlapping objectives of domestic and international economic policies. The author summarizes the historical and contemporary context for international tax competition, particularly with respect to income shifting, macro- and micro-challenges of tax arbitrage, and the tradeoffs involved in managing the domestic politics of taxation. The author concludes by identifying the options available for maintaining domestic fiscal and policy flexibility while responding effectively to growing tax competition, as embodied in the US tax reform of 2017 and other shifts in policy that point to declining political commitment to an open economy paradigm among Canada's major trading partners.

scholarly journals PROFIT SHIFTING TO EUROPEAN TAX HAVENS: THE CASE OF SUBSIDIARIES OF MULTINATIONAL COMPANIES IN SERBIA

TEME ◽  
2021 ◽  
pp. 1441
Author(s):  
Stefan Vržina
Keyword(s):  
Statistical Tests ◽  
Multinational Companies ◽  
Tax Burden ◽  
Public Disclosure ◽  
Tax Rates ◽  
Profit Shifting ◽  
Tax Havens ◽  
Significant Difference ◽  
Tax Haven ◽  
National Tax

Due to the presence in a number of countries, multinational companies (MNCs) are in position to register a considerable part of pre-tax profit in countries with a preferential tax regime in order to avoid paying taxes at high rates. In other words, MNCs are able to shift profit from countries with a high tax burden to countries with low tax burden. In this paper, it is examined whether Serbian subsidiaries of MNCs, directly owned by European tax haven entities, more intensively shift profit to tax havens relative to other subsidiaries. A list of tax havens published by Oxfam in 2016 is used. Statistical tests and regression analysis showed that there is no significant difference in profit shifting to tax havens between two mentioned groups of subsidiaries. Therefore, it is possible that MNCs consider Serbia as a country with preferential tax regime due to relatively low statutory and effective corporate income tax rates. However, for the purposes of a detailed analysis, national tax authorities should insist on public disclosure of company tax reports to make tax practices of MNCs more transparent.

scholarly journals Policy Forum: Business Tax Reform in the United States and Canada

2019 ◽  
Vol 67 (1) ◽  
pp. 57-66
Author(s):  
Ken McKenzie ◽  
Michael Smart
Keyword(s):  
Tax Reform ◽  
The United States ◽  
Economic Effects ◽  
Tax Rates ◽  
The Us ◽  
Key Features ◽  
Business Tax ◽  
Jobs Act ◽  
Policy Forum ◽  
Tax Depreciation

The authors examine some of the key features of the US Tax Cuts and Jobs Act (TCJA) and discuss the implications for Canadian corporations and government revenues. They show that the tax advantage that Canada enjoyed prior to the TCJA has declined significantly, in terms of both statutory and effective (marginal and average) tax rates. They discuss the economic effects of possible responses to the TCJA by Canadian governments, including cutting statutory rates and accelerating tax depreciation deductions. Looking ahead, the authors argue that it would be preferable to focus on a more fundamental tax reform based on the taxation of economic rents.

scholarly journals The Rise of China and Contestation in Global Tax Governance

2021 ◽  
Author(s):  
Rasmus Corlin Christensen ◽  
Martin Hearson
Keyword(s):  
Tax Avoidance ◽  
The United States ◽  
Political Agenda ◽  
Tax Rates ◽  
Tax Havens ◽  
Chinese Business ◽  
Economic Politics ◽  
Rise Of China ◽  
Changing Economy ◽  
The Rise Of China

Debate over the taxation of international business has focused on the importance of the United States and its large tech firms, paying low tax rates by using tax havens, in shaping the global political agenda. Yet in an era of China’s rise to power, this focus has overlooked both China’s influential political engagement with the global tax system, and how its changing economy alters its interests at home and abroad. In this paper, we address this oversight by providing an account of the sources and nature of the new Chinese global tax diplomacy. We argue that China's becoming a global net capital exporter, emergence as a major consumer market, and the growth of its own digital giant firms like Baidu, Tencent and Alibaba, underpins its interest in simultaneous ‘going out’ and ‘bringing in’ foreign direct investment by selectively and strategically engaging with Western-liberal institutions. Specifically, we show how China variously challenges, defends, and develops alternatives to global tax standards in three cases: global efforts to tackle corporate tax avoidance, bilateral tax treaty negotiations, and administrative tax cooperation. A better understanding of China’s significant, distinctive and varying diplomatic engagement with Western economic institutions, will help inform debates on the Chinese business-politics nexus and expand analyses of global tax and economic politics beyond US-centrism

scholarly journals Cracking Shells

2017 ◽  
Vol 5 (1) ◽  
pp. 133-153 ◽  
Author(s):  
Nicholas Vail
Keyword(s):  
United States ◽  
Money Laundering ◽  
The United States ◽  
Law Firm ◽  
Tax Havens ◽  
Bilateral Agreements ◽  
Criminal Organizations ◽  
Global Issue ◽  
Tax Haven ◽  
Beneficial Ownership

In early 2016, the International Consortium of Investigative Journalists released a report detailing thousands of leaked documents demonstrating how a Panamanian law firm had, for years, helped wealthy clients conceal their financial activities through the use of offshore shell companies. The Panama Papers, as the leaked documents came to be known, directed renewed attention at the use of shell companies. Shell companies are used by the world’s wealthy and powerful to lower their taxes, but are also used by tax evaders, criminal organizations, and terrorists. While much of the renewed attention has been directed at offshore tax havens such as Panama, the United States is itself considered a tax haven by many, largely due to states such as Delaware, which has long catered to individuals desiring secrecy. In response to the Panama Papers, numerous international jurisdictions have looked to strengthen their laws governing the creation of shell companies and considered the mechanisms used to facilitate exchanges of information. This Article will examine one of those responses—the European Union’s Anti-Money Laundering Directive—as an example of the changes the United States should apply to its own domestic laws and as an example of the multilateral framework needed to address a global issue. This Article will argue that the United States should follow the European Union’s Anti-Money Laundering Directive’s lead in strengthening its laws regarding the disclosure of beneficial ownership information, creating shared registers of beneficial owners, implementing penalties for noncomplying entities, and moving towards creating multilateral, as opposed to bilateral, agreements to combat the misuse of shell companies.

scholarly journals International tax competition and justice: The case for global minimum tax rates

2019 ◽  
Vol 18 (3) ◽  
pp. 242-263
Author(s):  
Andreas Cassee
Keyword(s):  
Tax Competition ◽  
Global Minimum ◽  
Point Of View ◽  
Self Determination ◽  
Tax Rates ◽  
Redistributive Taxation ◽  
International Tax Competition ◽  
Theories Of Justice ◽  
Independent Mechanism ◽  
International Tax

International tax competition undermines states’ capacity for redistributive taxation. It is thus problematic from the point of view of both cosmopolitan and internationalist theories of justice. This article examines the proposal of a fiscal policy constraint that prohibits tax policies if they are strategically motivated and harmful to effective fiscal self-determination internationally. I argue that we should opt for a more robust, preference-independent mechanism to prevent harmful tax competition instead. States should, as a matter of justice, accept global minimum tax rates on mobile tax bases.

scholarly journals Trouble in Paradise? Disclosure After Tax Haven Leaks

2021 ◽  
pp. 0148558X2098634
Author(s):  
Fabian Schmal ◽  
Katharina Schulte Sasse ◽  
Christoph Watrin
Keyword(s):  
Jel Classification ◽  
Annual Reports ◽  
Tax Rates ◽  
Public Attention ◽  
Tax Havens ◽  
Unethical Conduct ◽  
Corporate Behavior ◽  
Exogenous Shocks ◽  
Doing Business ◽  
Tax Haven

Tax haven leaks have attracted negative public attention in recent years, prompting scrutiny of corporate behavior in leaked jurisdictions. We investigate whether U.S. companies with subsidiaries in implicated tax havens change their disclosure behavior after a leak. The Offshore Leaks, Panama Papers, Bahamas Leaks, and Paradise Papers are included in this study. We analyze the leaks as separate exogenous shocks to the affected firms’ behavior using a difference-in-differences approach. First, we focus on the readability of tax footnotes in annual reports. Our results suggest that tax footnotes are less readable after a firm’s tax haven is implicated in a leak. This finding suggests that implicated firms try to obfuscate information and hide unethical conduct. Second, we investigate firms’ disclosures of tax expenses using GAAP effective tax rates and find that companies report higher tax expenses after a leak. These changes in behavior could indicate that firms are concerned about the increasingly critical public attitude toward doing business in leaked low-tax jurisdictions and that they are taking measures to counteract possible negative reputational consequences. JEL Classification: F23, G14, H26, M41

scholarly journals The Impact of Globalization and International Tax Competition on Tax Policies

2020 ◽  
Vol 11 (4) ◽  
pp. 1
Author(s):  
Alla Sokolovska ◽  
Tetyana Zatonatska ◽  
Andriy Stavytskyy ◽  
Oleksii Lyulyov ◽  
Vincent Giedraitis
Keyword(s):  
Tax Competition ◽  
General Level ◽  
Tax Burden ◽  
Tax Rates ◽  
Negative Effects ◽  
Tax System ◽  
Association Agreement ◽  
International Tax Competition ◽  
International Tax ◽  
The Impact

The aim of the paper is to determine to what extent the strengthening of the transparency of the Ukrainian economy and its incorporation in international tax competition affects the tax policy of the country and the peculiarities of its tax system. In the study, the logical analysis of the direct and inverse relationship of changes in taxation with such manifestations of globalization, as the movement of capital and labor resources from Ukraine and to the country, is combined with an empirical (regression) analysis of the relationship between globalization and the main characteristics of the Ukrainian tax system. It is proved that the increase of incorporation of Ukraine in globalization processes, despite the reduction of taxes on the main factors of production, is accompanied by an increase in the general level of tax burden on the economy (tax rate). The above mentioned is a consequence of increase of other taxes, including excise, caused both by internal needs of Ukraine (conducting the policy of fiscal consolidation caused by large public debt, and increasing defense expenditures) and its international obligations (EU Association Agreement). The tax system in Ukraine is much stronger (about 25%) influenced by the general index of globalization in comparison with its subindex characterizing the economic component of globalization. Obviously, this is owing to the greater influence on taxation in Ukraine of other components of globalization such as political and social one. The results show that the growth of the globalization index is accompanied by rather expected effects such as reduction of corporate profit tax rates and personal income tax, transferring the tax burden from capital to labor and, to a greater extent, on consumption, improving business conditions in the context of tax payments, and specific increase in the general level of tax burden on the economy, significant losses of the state that is not so much from the reduction of tax rates as from the erosion of the tax base on income, which is the result of a combination of negative effects of external and internal factors; the threat of escalating the policy of low tax rates. It is recommended to the Ukrainian Government to focus increasingly on the tax evolution trends in post-socialist EU countries to strengthen Ukraine`s position in tax competition with this group of countries.

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