Main Tax Policy Matters for Establishing Chile as a Regional Operative Investment Hub

2021 ◽  
Vol 22 (3) ◽  
Author(s):  
Hugo Hurtado ◽  
Jaime Del Valle
Keyword(s):  
Foreign Investment ◽  
Tax Policy ◽  
Policy Design ◽  
Oecd Countries ◽  
Policy Instrument ◽  
Holistic View ◽  
Regional Approach ◽  
Key Policy ◽  
Past Experiences ◽  
International Tax Policy

Unlike other OECD countries, Chile has not yet established a uniform tax policy toward foreign investment. Moreover, Chile had past experiences of unsuccessful legislation on specific exempted investment vehicles created with the purpose of establishing the country as a hub or platform for foreign investment. An effective international tax policy design requires taking a holistic view of the challenges and their corresponding solutions. As a country’s tax regime is a key policy instrument that may negatively or positively influence investment, Chilean tax policy is being oriented in this regard. This Article reviews the progress of those projects and current legislation, compares other OECD countries’ experiences in this matter, analyzing the main facts or elements to consider upon deciding the relevant tax policy, and finally proposes a tax regime that could make Chile more competitive when attracting foreign operative investment, focused on a more regional approach. Accordingly, this Article also intends to serve as guide or help to be considered by regulators on the hard road of designing tax standards. 

scholarly journals INTER-NATION EQUITY REVISITED

2020 ◽  
Vol 12 (1) ◽  
pp. 58-88
Author(s):  
Ivan Ozai
Keyword(s):  
Tax Policy ◽  
Policy Design ◽  
International Taxation ◽  
Recent Attempt ◽  
Tax Base ◽  
Poverty And Inequality ◽  
International Tax ◽  
The One ◽  
International Tax Policy ◽  
Degree Of Redistribution

States are on the verge of a new form of global competition. Some have taken unilateral measures to tax multinational profits that they would typically not be able to tax, at least not according to conventional international tax concepts and rules. Others have threatened to retaliate with economic countermeasures to protect their tax base and corporate residents. The recent attempt of the OECD to build consensus for a global tax compact has so far proven unsuccessful due to broad disagreement about how taxing rights should be equitably distributed between countries. As policymakers and tax scholars increasingly call into question long-standing theories of international taxation, the concept of inter-nation equity plays a pivotal role as a guiding principle in determining how to divide the international tax base among states. Inter-nation equity is one of the most ubiquitous concepts appearing in international tax policy discussions and yet one of the most understudied in tax scholarship. This Article introduces a comprehensive normative analysis of inter-nation equity by discussing how the concept should reconcile the two primary goals of international allocation of taxing rights: on the one hand, the concern of states to preserve their tax sovereignty and, on the other hand, the need to promote some degree of redistribution to address the challenges of global poverty and inequality. This Article further explains how a similar notion of inter-nation equity has developed in other areas of international law and discusses some practical implications for tax policy design.

The Importance of Lawyers in International Tax Policy Design and Development: An Exploration and Extension of the Legal-Economic Literature

2019 ◽  
Author(s):  
Ann Kayis-Kumar
Keyword(s):  
Tax Policy ◽  
Multinational Enterprises ◽  
Policy Design ◽  
Legal Analysis ◽  
Tax Legislation ◽  
Theoretical Approaches ◽  
Linear Optimisation ◽  
International Tax ◽  
National Tax ◽  
International Tax Policy

The advent of the global digital economy has increased opportunities for aggressive tax planning by multinational enterprises (‘MNEs’). Governments are increasingly faced with the competing objectives of remaining internationally competitive and encouraging foreign investment while also protecting their national tax bases. Two key trends have had a significant impact on the international tax debate. First, over the past three decades, the rise of MNEs and the prominence – and dominance – of inter-company trade as a proportion of global trade has fundamentally shifted the influence of individual governments’ tax policies. Second, even though corporate tax policy has traditionally been a field dominated by economists, there is now a shift towards ‘politicisation’ of the debate. The focus of this article is on the importance of legal practitioners and scholars in assisting with meaningful reform at the intersection of these two trends – and examining alternative theoretical approaches to tax policy. In doing so, this article also bridges two disciplines by combining legal analysis with linear optimisation modelling (to simulate a tax-minimising MNE’s behavioural responses to both existing and proposed tax legislation). Ultimately, it is hoped that this research will present a platform for further discussion on the tax treatment of cross-border intercompany transactions, and facilitate the development of improvements to both the tax law design and drafting.

scholarly journals Offshore financial activity and tax policy: evidence from a leaked data set

2016 ◽  
Vol 36 (3) ◽  
pp. 457-488 ◽  
Author(s):  
Paul Caruana-Galizia ◽  
Matthew Caruana-Galizia
Keyword(s):  
Tax Policy ◽  
Control Group ◽  
Data Set ◽  
Financial Activity ◽  
Interest Income ◽  
Beneficial Ownership ◽  
International Tax ◽  
International Tax Policy

AbstractWe assess the European Union’s (EU) most significant international tax policy. The 2005 Tax and Savings Directive obliges cooperating jurisdictions to withhold tax or report on interest income earned by entities whose beneficial owner is an EU resident. As the Directive applies only to beneficial ownership in cooperative jurisdictions, it can be circumvented by transferring ownership to a non-EU resident or company or by transferring the entity to a non-cooperative jurisdiction. Using a database on individual offshore entities leaked from two firms in 2013, we compare the response of EU-owned entities with a control group of non-EU-owned entities. We show that the growth of EU-owned entities declined immediately after the Directive’s implementation, whereas that of non-EU-owned entities remained stable. We observe the substitution of EU ownership for non-EU ownership, as well as the substitution of cooperative for non-cooperative offshore jurisdictions. This calls for anti-evasion policies that are broader in scope and scale.

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.

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