developing countries , foreign aid , double taxation agreements
Abstract:
Out of a total of 2,976 double tax agreements (DTAs), some 60% are signed
between a developing and a developed economy. As DTAs shift taxing rights from
capital importing to capital exporting countries, the prior would incur a loss. We
demonstrate in a theoretical model that in a deal one country does not trump the
other, but that the deal must be mutually beneficial. In the case of an asym-
metric DTA, this requires compensation from the capital exporting country to the
capital importing country. We provide empirical evidence that such compensation
is indeed paid, for instance in the form of bilateral official development assistance,
which increases on average by six million US$ in the year of the signature of a DTA.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
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