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2018 | 104 | 343-353
Article title

The remedies for “treaty shopping” in view of current legislation

Content
Title variants
Languages of publication
EN
Abstracts
EN
The article explains the issue of the “treaty shopping” method which tends to be one of the types of the unlawful tax behaviour. At first, the history of the “treaty shopping” method and its main features are described. The dissertation is focused especially on the examples of the practical use of the third company in a specific contractual relation which ought to be only between two parties. Then, the deliberation presents the combination of using the “treaty shopping” method and “tax heavens” which is frequently practiced by the companies to pay lower tax rates or even avoid paying any taxes. After that, both the positive and the negative consequences of the aforementioned tax behaviour are described. The main part of the article delves into the possible remedies for the unlawful tax practices depending on the outlook of each government. The conclusions refer to the effects of decreasing the current number of “treaty shoppers”.
Year
Volume
104
Pages
343-353
Physical description
Contributors
  • Faculty of Law and Administration, Jagiellonian University in Cracow 24 Gołębia Street, 31-007 Cracow, Poland
author
  • Faculty of Law and Administration, Jagiellonian University in Cracow 24 Gołębia Street, 31-007 Cracow, Poland
References
  • [1] R. S. Avi-Yonah, Re-thinking treaty shopping: lessons for the European Union, Law & Economics Working Papers 2010, vol. 7, pp. 6-7.
  • [2] B. A. Blonigen, R. B. Davies, The effects of Bilateral Tax Treaties on U.S. FDI Activity, International Tax and Public Finance 2004, vol. 11, p 5.
  • [3] H. Cai, Q. Liu, Competition and corporate tax avoidance: Evidence from Chinese industrial firms, The Economic Journal 2009, vol. 119, p. 1.
  • [4] F. Crandall, The Termination of the United States-Netherlands Antilles Tax Treaty: What were the costs of ending Treaty Shopping, Northwestern Journal of International Law & Business 1988, vol. 9, pp. 355-356.
  • [5] D. Dharmapala, J. R. Hines Jr., Which countries become tax havens?, Journal of Public Economics 2009, vol. 93, p. 1058.
  • [6] L. Eden, R. T. Kudrle, Tax Havens: Renegade States in the International Tax Regime?, Law and Policy 2005, vol. 27, p. 118.
  • [7] C. Fuest, Book Review. The indirect side of direct investment by Jack. M. Mintz and Alfons J. Weichenrieder, National Tax Journal 2012, vol. 65, p. 733.
  • [8] M. P. Hampton, J. Christensen, Offshore Pariahs? Small Islands Economies, Tax Havens, and the Re-configuration of Global Finance, World Development 2002, vol. 30, p. 1657.
  • [9] K. Kalotay, Indirect FDI, The Journal of World Investment & Trade 2012, vol. 13, p. 547.
  • [10] W. Kessler, R. Eicke, Germany: Treaty shop until you drop, Tax Notes International 2007, vol. 46, p. 378.
  • [11] La Porta, F. Lopez-de-Silanes, A. Schleifer, R. Vishny, Investor Protection and Corporate Governance, Journal of Financial Economics 2000, vol. 58, p.1.
  • [12] R. Palan, Tax Heavens and the Commercialization of State Sovereignty, International Organization 2002, vol. 56, p. 154.
  • [13] A. Sandmo, The theory of tax evasion: A retrospective view, National Tax Journal 2005, vol. 58, p. 4.
  • [14] J. Slemrod, J. D. Wilson, Tax competition with parasitic tax havens, Journal of Public Economics 2009, vol. 93, p. 1261.
  • [15] R. Van Os, R. Knottnerus, Dutch Bilateral Investment Treaties. A gateaway to ‘treaty shopping’ for investment protection by multinational companies, SOMO Amsterdam, Nederland 2011, p. 10.
  • [16] F. Weyzig, Tax treaty shopping: structural determinants of Foreign Direct Investment routed through the Netherlands, International Tax and Public Finance 2013, vol. 20, p. 910.
Document Type
article
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.psjd-d2a7d27a-d51e-404d-a25e-c00e73d1922b
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