scholarly journals Tax Treaty Aggressiveness: Who is Undermining Taxing Rights in Africa?

2021 ◽  
Author(s):  
Lucas Millán-Narotzky ◽  
Javier García-Bernado ◽  
Maïmouna Diakité ◽  
Markus Meinzer
Keyword(s):  
United Arab Emirates ◽  
Tax Avoidance ◽  
Multinational Companies ◽  
Tax Rates ◽  
Tax Treaties ◽  
African Countries ◽  
The United Kingdom ◽  
Permanent Establishment ◽  
Treaty Shopping ◽  
Development Goals

Tax avoidance strategies by multinational companies rely heavily on tax treaties. Multinational companies can relocate financial activities across countries to ensure the applicability of the most beneficial tax treaties. This ‘treaty shopping’ can be particularly harmful to African countries, impairing their efforts for domestic resource mobilisation and achieving sustainable development goals. In this paper, we analyse the aggressiveness of tax treaties towards African countries – the extent to which signing tax treaties reduces the taxing rights of African governments. We find that treaties signed with France, Mauritius and the United Arab Emirates reduce withholding tax rates the most, while treaties signed with European countries – and, in particular, the United Kingdom and France – greatly limit other taxing rights, for example, by restricting the scope of permanent establishment definition.

Tax Abuse and Implications for Human Rights in Africa

2019 ◽  
pp. 189-208
Author(s):  
Annet Wanyana Oguttu ◽  
Monica Iyer
Keyword(s):  
Human Rights ◽  
Multinational Enterprises ◽  
Tax Reform ◽  
Tax Avoidance ◽  
International Taxation ◽  
Fair Share ◽  
Profit Shifting ◽  
African Countries ◽  
Tax System ◽  
Development Goals

This chapter analyzes whether the international tax reform measures instituted under the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Project are effective in ensuring African countries get a fair share of taxes from multinational enterprises (MNEs) transacting within their borders, so that they can finance their development goals and promote the human rights of their citizens. The OECD chose to focus on curtailing sophisticated tax-avoidance schemes by strengthening existing anti-avoidance provisions. MNEs have abused these existing laws, however, making them largely ineffective. Given that MNEs are always a step ahead in devising new tax-avoidance strategies, one wonders whether emphasis on strengthening anti-avoidance laws will achieve much. The OECD seems to have missed an opportunity to evaluate the whole tax system and deal with the very root of the problems inherent in international taxation.

International Transfer Pricing and Tax Avoidance: Evidence from Linked Trade-Tax Statistics in the United Kingdom

2020 ◽  
Vol 102 (4) ◽  
pp. 766-778 ◽  
Author(s):  
Li Liu ◽  
Tim Schmidt-Eisenlohr ◽  
Dongxian Guo
Keyword(s):  
United Kingdom ◽  
Multinational Firms ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Tax Rates ◽  
Corporate Tax ◽  
The United Kingdom ◽  
Tax Returns ◽  
Medium Level ◽  
Transfer Prices

This paper employs unique data on export transactions and corporate tax returns of UK multinational firms and finds that firms manipulate their transfer prices to shift profits to lower-taxed destinations. It shows that the 2009 tax reform in the United Kingdom, which changed the taxation of corporate profits from a worldwide to a territorial system, led to a substantial increase in transfer mispricing. It also provides evidence for a trade creation effect of transfer mispricing and estimates substantial transfer mispricing in non-tax-haven countries with low- to medium-level corporate tax rates, and in R&D intensive firms.

scholarly journals The Permanent Establishment Concept In Double Tax Agreements Between Developed And Developing Countries: Canada/South Africa As A Case In Point

2014 ◽  
Vol 13 (3) ◽  
pp. 539
Author(s):  
Lee-Ann Steenkamp
Keyword(s):  
South Africa ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Developing Country ◽  
Direct Investment ◽  
Tax Avoidance ◽  
Tax Treaties ◽  
Permanent Establishment ◽  
Business Income

In this era of globalisation, developing countries have resorted to double tax agreements in order to attract foreign direct investment. The extent to which a countrys tax treaty policy favours developing countries or not depends upon the extent to which the country is prepared to adopt provisions from the UN model tax convention as opposed to the OECD model. Developing countries in particular should carefully consider the design of their tax treaties so as to effectively combat tax avoidance, without sacrificing foreign direct investment. To this end, the Canada/South Africa tax treaty is compared and contrasted with these two models. The concept of permanent establishment is reviewed in this context. It was found that the Canada/South Africa tax treaty is overwhelmingly based on the OECD model. This could indicate that South Africa has a deliberate tax treaty policy of ceding taxing rights to other countries. Thus, developing countries are seemingly unable or unwilling to make use of the UN model so as to retain greater source taxation. A number of recommendations are made to broaden the scope for the source taxation of business income in the developing country.

scholarly journals The unintended consequences of bilateralism: Treaty shopping and international tax policy

2018 ◽  
Author(s):  
Vincent Arel-Bundock
Keyword(s):  
International Investment ◽  
Unintended Consequences ◽  
Tax Rates ◽  
Tax Treaties ◽  
Coordination Problem ◽  
Fiscal Autonomy ◽  
Treaty Shopping ◽  
International Tax ◽  
International Tax Policy

The international tax system is a complex regime composed of thousands of bilateral tax treaties. These agreements coordinate policies between countries to avoid double taxation and encourage international investment. I argue that by solving this coordination problem on a bilateral basis, states have inadvertently created opportunities for treaty shopping by multinationals. These opportunities, in turn, reduce the potency of fiscal policy, put pressure on governments to change their domestic tax laws, and ultimately constrain state autonomy. This constraint is theoretically distinct from the usual race-to-the-bottom story and it generates different testable implications. I use a motivating case study to show how multinationals leverage the structure of the treaty network to reduce their tax burden. Then, I develop a new measure of treaty-shopping opportunities for firms in 164 countries. Where the proliferation of tax treaties allows multinationals to engage in treaty shopping, states’ fiscal autonomy is limited, and governments tend to maintain lower tax rates.

scholarly journals The Unintended Consequences of Bilateralism: Treaty Shopping and International Tax Policy

2017 ◽  
Vol 71 (2) ◽  
pp. 349-371 ◽  
Author(s):  
Vincent Arel-Bundock
Keyword(s):  
International Investment ◽  
Unintended Consequences ◽  
Tax Rates ◽  
Tax Treaties ◽  
Coordination Problem ◽  
Fiscal Autonomy ◽  
Treaty Shopping ◽  
International Tax ◽  
International Tax Policy

AbstractThe international tax system is a complex regime composed of thousands of bilateral tax treaties. These agreements coordinate policies between countries to avoid double taxation and encourage international investment. I argue that by solving this coordination problem on a bilateral basis, states have inadvertently created opportunities for treaty shopping by multinationals. These opportunities, in turn, reduce the potency of fiscal policy, put pressure on governments to change their domestic tax laws, and ultimately constrain state autonomy. This constraint is theoretically distinct from the usual race-to-the-bottom story and it generates different testable implications. I use a motivating case study to show how multinationals leverage the structure of the treaty network to reduce their tax burden. Then, I develop a new measure of treaty-shopping opportunities for firms in 164 countries. Where the proliferation of tax treaties allows multinationals to engage in treaty shopping, states’ fiscal autonomy is limited, and governments tend to maintain lower tax rates.

scholarly journals SPECIFIC ANTI RULE AVOIDANCE (SAAR): HOW DOES IT AFFECT TAX AVOIDANCE?

2020 ◽  
Vol 10 (1) ◽  
Author(s):  
Agustin Dwi Haryanti ◽  
Firda Ayu Amalia
Keyword(s):  
Stock Exchange ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Multinational Companies ◽  
Independent Variables ◽  
Treaty Shopping ◽  
Special Rule ◽  
The Government ◽  
Foreign Corporations ◽  
Thin Capitalization

This study aims to empirically prove the influence of the Specific Anti Avoidance Rule (SAAR), namely transfer pricing, thin capitalization, controlled foreign corporations (CFCs), the use of tax heaven countries, and treaty shopping on tax avoidance. SAAR is a special rule to minimize tax avoidanceThe sample in this study is multinational companies listed on the Indonesia Stock Exchange in the 2015-2017 period. The method used is multiple linear regression with SPSS version 24. The results show that transfer pricing, thin capitalization, controlled foreign corporations (CFCs), utilization of tax heaven countries, and treaty shopping have no effect on tax avoidance. The absence of influence of the five independent variables on tax avoidance is due to the sample company data and also the proxy used. The results of the study are expected to contribute especially to the government regarding whether SAAR is sufficient to minimize and overcome tax avoidance and can also be a consideration for the government to implement the General Anti Avoidance Rule (GAAR) to cover the weaknesses of SAAR.

National Human Rights Institutions and Sustainable Development with Specific Reference to Selected African Examples

2020 ◽  
Vol 53 (1) ◽  
Author(s):  
John Mubangizi
Keyword(s):  
Sustainable Development ◽  
Human Rights ◽  
Best Practice ◽  
Specific Reference ◽  
African Countries ◽  
The Sustainable Development ◽  
Study Approach ◽  
National Human ◽  
Development Goals ◽  
National Human Rights Institutions

That National Human Rights Institutions (NHRIs) play an important role in the protection and promotion of human rights is a well-known fact. This has been widely acknowledged by the United Nations (UN). Also well-known is the fact that several African countries have enacted new constitutions during the last two to three decades. One of the most salient features of those new constitutions is that they establish NHRIs, among other things. Given their unique role and mandate, these NHRIs can and do play an important role in the realisation of the sustainable development goals contained in the UN 2030 Agenda for Sustainable Development. Adopting a case study approach, this article explores the role NHRIs have played in the promotion and protection of human rights in selected African countries and implications for sustainable development in those countries. The main argument is that there are several lessons African countries can learn from each other on how their NHRIs can more meaningfully play that role. Accordingly, best practice and comparative lessons are identified and it is recommended that NHRIs can contribute to sustainable development more meaningfully if they can make themselves more relevant, credible, legitimate, efficient and effective.

Domestic Anti-Avoidance Legislation in Relation to Tax Treaty Law

2017 ◽  
Vol 6 (2) ◽  
pp. 312
Author(s):  
Shkumbin Asllani
Keyword(s):  
International Law ◽  
Tax Avoidance ◽  
International Taxation ◽  
Main Principle ◽  
Legal Practice ◽  
Tax Treaties ◽  
International Tax ◽  
Tax Payers ◽  
The Relationship ◽  
Domestic Law

In today’s international taxation most of the developing countries enter into tax treaties which are drafted in line with the OECD MC to eliminate double taxation. Yet, is well-known fact that tax treaties in practice are abused by tax payers, therefore, majority of states have introduce legislation specifically designed to prevent tax avoidance and protect their domestic interests. In legal practice and literature the act of overriding international tax treaties and denying treaty benefits in favour of domestic law provisions threatens main principle of international law and therefore is questionable to what extend the relationship between domestic law and international tax treaty agreements bridges the international norms.

Ghana: the State of Agriculture and Prospects for Food Security in the Context of Achieving SDGs

2018 ◽  
pp. 16-31
Author(s):  
Tatyana Denisova
Keyword(s):  
Food Security ◽  
Socioeconomic Development ◽  
Agricultural Sector ◽  
Well Being ◽  
The State ◽  
Successful Implementation ◽  
Careful Study ◽  
African Countries ◽  
Development Goals ◽  
The Government

For the first time in Russian African studies, the author examines the current state of agriculture, challenges and prospects for food security in Ghana, which belongs to the group of African countries that have made the most progress in achieving the Sustainable Development Goals (SDGs). The SDGs are a collection of 17 global goals adopted by UN member states in 2015 with a view of achieving them by 2030. The SDGs include: ending poverty in all its forms everywhere (Goal 1); ending hunger, achieving food security and improved nutrition, and promoting sustainable agriculture (2); ensuring healthy lives and promoting well-being for all at all ages (3), etc. These goals are considered fundamental because the achievement of a number of other SDGs – for example, ensuring quality education (4), achieving gender equality (5), ensuring sustainable consumption and production patterns (12), etc. – largely depends on their implementation. Ghana was commended by the world community for the significant reduction in poverty, hunger and malnutrition between 2000 and 2014, i.e. for the relatively successful implementation of the first of the Millennium Development Goals (MDGs, 2000–2015) – the eradication of extreme poverty and hunger. However, SDGs require more careful study and planning of implementation measures. In order to achieve the SDGs, the Government of Ghana has adopted a number of programs, plans and projects, the successful implementation of which often stumbles upon the lack of funding and lack of coordination between state bodies, private and public organizations, foreign partners – donors and creditors, etc., which are involved in the processes of socioeconomic development of Ghana. The author determines the reasons for the lack of food security in Ghana, gives an assessment of the state of the agricultural sector, the effective development of which is a prerequisite for the reduction of poverty and hunger, primarily due to the engagement of a significant share (45%) of the economically active population in this sector. The study shows that the limited growth in food production is largely due to the absence of domestic markets and necessary roads, means of transportation, irrigation and storage infrastructure, as well as insufficient investment in the agricultural sector, rather than to a shortage of fertile land or labor.

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