On the Fragility of the International Taxation Legal System

2021 ◽  
Vol 22 (3) ◽  
Author(s):  
Monica Victor
Keyword(s):  
Global Governance ◽  
Legal System ◽  
Tax Competition ◽  
Governance Structure ◽  
International Taxation ◽  
Tax System ◽  
International Tax ◽  
Taxation System

This Article focuses on the OECD’s work on harmful tax competition todemonstrate how the OECD and subsidiary bodies’ governance structure,and the standard-settingprocess, built a fragile international taxationlegal system that is not just impairing legitimate tax competitionbut also failing to promote cooperation among tax jurisdictions. Theoption for the harmful tax competition work among other tax issuescovered by the OECD is justified by the difficulties faced by the WTODispute Settlement Body (DSB) while adjudicating the Argentina-FinancialServices dispute. In this dispute, Panama challenged theimposition of defensive tax measures against harmful tax competitionbased on a list of non-cooperativetax jurisdictions issued by the Argentine tax authority. The clash between the international tradelegal system and the international tax system unveiled the fragilities ofthe last related not just to the global governance structure but also theinternational tax standards for harmful tax competition. In spite ofthe recent efforts by the OECD by the lauching of the BEPS Project, thechallenge of making the international taxation system work for allMembers and non-Membersremains.

Global Governance, Tax Treaties, and Credible Commitments

World Affairs ◽  
2018 ◽  
Vol 181 (1) ◽  
pp. 69-98 ◽  
Author(s):  
Austin P. Johnson
Keyword(s):  
Global Governance ◽  
Tax Policy ◽  
Policy Instruments ◽  
Governance Structure ◽  
Gravity Models ◽  
Tax Treaties ◽  
Credible Commitments ◽  
Portfolio Holdings ◽  
International Tax ◽  
International Tax Policy

The international tax regime appears to be a weak system of global governance on the surface; however, I find that this system remains effective. This governance structure is built upon the thousands of tax treaties that function as policy instruments for advancing the implementation of global tax policy. Yet there is conflicting evidence in relation to the efficacy of these treaties, necessitating further exploration. In this article, I offer an accessible introduction to some of the key dynamics of the international tax regime and, in doing so, systematically address whether tax treaties may have the capacity to spur cross-border investment in securities. Using augmented gravity models, I find strong empirical evidence in favor of my theory that tax treaties function as credible commitments to international tax norms, potentially increasing portfolio holdings of some foreign securities. My findings should be of significant importance to scholars of international organizations, global governance, and international tax policy.

What made base erosion and profit shifting project possible?

2018 ◽  
Vol 25 (3) ◽  
pp. 795-810
Author(s):  
Akira Matsuoka
Keyword(s):  
Historical Context ◽  
Tax Avoidance ◽  
International Taxation ◽  
Profit Shifting ◽  
Tax System ◽  
Content Type ◽  
Grass Roots ◽  
Legal Perspective ◽  
Before And After ◽  
International Tax

Purpose The purpose of this paper is to unveil the true background of the Base Erosion and Profit Shifting (BEPS) Project and to suggest crucial indexes for bringing a movement into a future ceiling causing a struggle of the international tax system. Design/methodology/approach This paper looks into the historical context of this project before and after Starbucks’ scandal, comparing to other contexts of the international tax system. Also, this paper partially reviews BEPS from a legal perspective. Findings The key factors for building momentum of reform of international taxation are a country having a government willing to embrace the cause of reform, unfairness felt toward entities using tax avoidance schemes which other comparable entities could not be use, grass-roots pressure for the reform, effective places to negotiate cooperation among major countries for the reform, solid cooperation among many countries in the world to implement standards and rhetoric of slogan with less opposition. Originality/value The momentum of the reform of international taxation was analyzed before. But the BEPS Project has involved some unique events as compared with the Organization for Economic Cooperation and Development’s project on harmful tax practices, such as initiation of NGOs and boycott by consumers. Additionally, this paper will discuss insights, which the former research did not do.

Gains from Trade in Government Revenue and Pareto-Efficient International Taxation

2005 ◽  
Vol 5 (1) ◽  
Author(s):  
Jeremy Edwards
Keyword(s):  
International Taxation ◽  
Government Revenue ◽  
Gains From Trade ◽  
Tax System ◽  
Commodity Taxes ◽  
Special Cases ◽  
Pareto Efficient ◽  
International Tax ◽  
International Transfers

AbstractThis paper uses the concept of gains from trade in government revenue to clarify and extend the analysis of Keen and Wildasin (2004). It shows that their results derive from the use of trade taxes to achieve gains from trade in revenue in circumstances when direct international transfers cannot be used for this purpose. The paper shows that, in such circumstances, Pareto-efficient international equilibria are globally production-inefficient only in special cases, but origin-based commodity taxes, source-based capital taxes, and taxes on trade are nevertheless typically part of a Pareto-efficient international tax system. However, this conclusion depends on ruling out the use of international transfers to trade revenue, the case for which is not compelling.

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.

Community Interests in International Taxation

2018 ◽  
Author(s):  
Tsilly Dagan
Keyword(s):  
Tax Competition ◽  
Tax Policy ◽  
Conventional Wisdom ◽  
International Taxation ◽  
Collective Good ◽  
Market Failures ◽  
Double Taxation ◽  
Second Best ◽  
International Tax ◽  
International Tax Policy

This chapter describes the multilateral efforts regarding four key concerns of the international community: Prevention of double taxation, fighting “harmful tax competition,” sharing of information, and the “gaps and frictions” between the tax systems of various countries noted by the recent BEPS report. It then asks what, in fact, constitutes the community’s interest in the international tax area, arguing that where tax policy is concerned, there is no clear “textbook answer” regarding the best way to tax internationally. The chapter criticizes two proxies which are often implicitly endorsed in order to evaluate international tax policy: Cooperation among states, and the prevention of market failures. It argues that cooperation, contrary to conventional wisdom, is neither a goal in itself nor is it a good enough proxy for the collective good, and that the elimination of market failures, although indisputably beneficial, may raise a second-best problem.

scholarly journals FAKTOR-FAKTOR YANG MEMENGARUHI KEMAUAN MEMBAYAR PAJAK WAJIB PAJAK ORANG PRIBADI YANG MELAKUKAN PEKERJAAN BEBAS (STUDI KASUS PADA KPP PRATAMA KOTA PEKALONGAN)

2020 ◽  
Vol 23 (2) ◽  
pp. 31
Author(s):  
Dian Prihatiningsih
Keyword(s):  
Linear Regression ◽  
Willingness To Pay ◽  
Multiple Linear Regression ◽  
Legal System ◽  
Legal Systems ◽  
Tax System ◽  
Degree Of Confidence ◽  
Independent Variable ◽  
The Government ◽  
Taxation System

This study aims to analyze the factors that affect the willingness to pay taxes on taxpayers of individuals who perform free work in the office of KPP Pratama Pekalongan. The variables in this study are taxpayer willingness as dependent variable knowledge of taxation regulation, understanding of tax regulation, good perception on tax system and level of trust to government system and law as independent variable. The population in this study were free workers registered in KPP pratama stem. The sample used in this research is as many as 63 respondents are free workers registered in KPP pratama stem. Meanwhile, to answer the hypothesis in this research is done classical assumption test and multiple linear regression. The result of the research shows that variable knowledge of tax regulations, understanding of tax regulations, a good perception of the effectiveness of the taxation system has a significant effect on willingness to pay taxes but for the level of trust in the government and the legal system has no significant effect on willingness to pay taxes. Keywords: knowledge of tax regulations, understanding of tax laws, good perceptions of the effectiveness of the tax system and the degree of confidence in government and legal systems.

scholarly journals Impact of tax competition on fiscal incomes of Kazakhstan in terms of tax competitive environment

2020 ◽  
Vol 159 ◽  
pp. 06006
Author(s):  
Aliya Shakbutova ◽  
Abdizhapar Saparbayev ◽  
Popek Stanislaw ◽  
Aiymzhan Makulova ◽  
Aigerim Nurmukhan
Keyword(s):  
Tax Competition ◽  
International Standards ◽  
Competitive Environment ◽  
Tax Reforms ◽  
Tax System ◽  
International Tax Competition ◽  
The World ◽  
International Tax ◽  
The Republic ◽  
Tax Reporting

International tax competition requires tax reforms from all countries in the world. To meet international standards, countries use different methods to attract resources to their economies. Fierce tax competition in the world has prompted Kazakhstan to significantly liberalize the tax system, reduce the number of taxes and their rates for the main types of taxes, and simplify tax registration procedures, tax accounting and tax reporting for taxpayers, making it one of the most attractive tax systems in the world. However, such actions and reforms aimed at improving tax competitiveness may in one way or another affect Kazakhstan’s fiscal income, which is an important topic of research. The research is based on the tax system and tax income of the Republic of Kazakhstan in the international tax competitive environment. In the course of the study, the tax system of Kazakhstan, its features and reforms, and the structure of the budget income of Kazakhstan were primarily analyzed. Keywords: tax competition, tax system, fiscal income, effects of tax competition.

International Tax and Global Justice

2017 ◽  
Vol 18 (1) ◽  
pp. 1-35 ◽  
Author(s):  
Tsilly Dagan
Keyword(s):  
Distributive Justice ◽  
Tax Competition ◽  
Global Justice ◽  
The State ◽  
International Taxation ◽  
Political Justice ◽  
Poor Countries ◽  
Transfer Payments ◽  
International Tax ◽  
International Tax Policy

AbstractInequality, as well as the scope of the duty of justice to reduce it, has always been a central concern of political justice. Income taxation has been seen as a key tool for redistribution and the state was the arena for discussions of justice. Globalization and the tax competition it fosters among states change the context for the discussion of distributive justice. Given the state’s fading coercive power in taxation and the decreasing power of its citizenry to co-author its collective will due to global competition, we can no longer assume that justice can be realized within the parameters of the state. International tax policy in an effort to retain justice often opts for cooperation as a vehicle to support distributive justice. But cooperation among states is more than a way for them to promote their aims through bargaining. Rather, it is a way for states to regain legitimacy by sustaining their very ability to ensure the collective action of their citizens and to treat them with equal respect and concern. The traditional discussion in international taxation seems to endorse a statist position — implicitly assuming that when states bargain for a multilateral deal, justice is completely mediated by the agreement of the states. In contrast, this Article argues that such a multilateral regime intended to provide the state with fundamental legitimacy requires independent justification. Contrary to the conventional statist position, I maintain that cooperating states have a duty to ensure that the constituents of all cooperating states are not treated unjustly because of the agreement. I argue that not only cosmopolitanism but political justice too requires that a justifiable cooperative regime must improve (or at least not worsen) the welfare of the least well-off citizens in all cooperating states. I explain that cooperation alone is no guarantee of improved welfare and that certain transfer payments between rich and poor countries might be required to ensure this.

Achieving Environmental and Fiscal Goals in Lithuania using Environmental Taxes

Ekonomika ◽  
2002 ◽  
Vol 58 ◽  
Author(s):  
Remigijus Čiegis ◽  
Vidmantas Jankauskas ◽  
Dalia Štreimikienė
Keyword(s):  
System Analysis ◽  
Environmental Taxation ◽  
Environmental Taxes ◽  
Methodological Issues ◽  
Tax System ◽  
Strategic Actions ◽  
Damage Costs ◽  
Accession Countries ◽  
Taxation System ◽  
New System

The main aim of this article is to analyse and compare the former and revised system of environmental taxes in Lithuania. Conceptual, analytical and methodological issues associated with the use of these instruments in the Lithuanian context are thoroughly discussed. Comparative and system analysis allows revealing deficiencies of the previous system of taxes and positive features of the new system. Comparison of pollution taxes available in Lithuania with the damage costs related to these pollutants emissions as well as comparison of environmental taxes with those of EU and accession countries allows to evaluate the efficiency of existing tax system in Lithuania and provide recommendations for strategic actions with respect of increasing effectiveness of existing environmental taxation system.

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.

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