Bargaining Over Tax Information Exchange
Max Planck Institute for Tax Law and Public Finance; Ludwig-Maximilians-Universität Munich - Munich Graduate School of Economics (MGSE)
February 28, 2012
Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2012-02
This paper empirically studies recent treaty signings between tax havens and OECD countries as the outcome of a bargaining process over treaty form. Havens can decide not to sign an agreement, sign a tax information exchange agreement or a double taxation convention. We use a highly stylized bargaining model to develop testable hypotheses with regards to the type of agreement signed. We show that the main determinants of treaty signing is a haven's bargaining power and good governance. We show that it is easier to renegotiate an already existent treaty to include information exchange than to pressure countries with no existent agreement.
Number of Pages in PDF File: 37working papers series
Date posted: February 29, 2012 ; Last revised: July 4, 2012
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