Quotation Braun, Julia, Zagler, Martin. 2017. The True Art of the Tax Deal: Evidence on Aid Flows and Bilateral Double Tax Agreements. ZEW - Centre for European Economic Research Discussion Paper No. 17-011.


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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 asymmetric 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.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title The True Art of the Tax Deal: Evidence on Aid Flows and Bilateral Double Tax Agreements
Title of whole publication ZEW - Centre for European Economic Research Discussion Paper No. 17-011
Year 2017
URL http://www.zew.de/publikationen/the-true-art-of-the-tax-deal-evidence-on-aid-flows-and-bilateral-double-tax-agreements/
JEL K33, F53, H25, H87, D82.

Associations

People
Zagler, Martin (Details)
External
Braun, Julia (ZEW Mannheim, Germany)
Organization
Research Institute for International Taxation FI (Details)
Institute for Macroeconomics IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5311 Public finance (Details)
5341 Economic policy (Details)
5343 Economic theory (Details)
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