Tax Treaties and the Allocation of Taxing Rights With Developing Countries

32 Pages Posted: 12 Feb 2013

See all articles by Dimitri Paolini

Dimitri Paolini

Universite du Luxembourg

Pasquale Pistone

Vienna University of Economics and Business

Giuseppe Pulina

Universita di Cagliari

Martin Zagler

Vienna University of Economics and Business - Department of Economics; University of Piemonte Orientale - Facoltà di Economia

Date Written: April 14, 2011

Abstract

Worldwide income taxation in the country of residence is a legal dogma of international taxation. We question this dogma from the perspective of relations between developed and developing countries from a legal and economic perspective, and make a modern and fair proposal for tax treaties. We will show under which conditions a developing and a developed country will voluntarily sign a tax treaty where information is exchanged truthfully and whether they should share revenues. Moreover, we will demonstrate how the conclusion of a tax treaty can assist in the implementation of a tax audit system.

Keywords: international corporate income taxation, tax treaties, revenue sharing, asymmetric information, uncertainty, locational decisions, principal-agent models

JEL Classification: F53, H25, H87, D82

Suggested Citation

Paolini, Dimitri and Pistone, Pasquale and Pulina, Giuseppe and Zagler, Martin, Tax Treaties and the Allocation of Taxing Rights With Developing Countries (April 14, 2011). WU International Taxation Research Paper Series No. 2012-08, Available at SSRN: https://ssrn.com/abstract=2174976 or http://dx.doi.org/10.2139/ssrn.2174976

Dimitri Paolini

Universite du Luxembourg

L-1511 Luxembourg
Luxembourg

Pasquale Pistone

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Giuseppe Pulina

Universita di Cagliari ( email )

Cagliari, 09124
Italy

Martin Zagler (Contact Author)

Vienna University of Economics and Business - Department of Economics ( email )

Augasse 2-6
A-1090 Wien
Austria

University of Piemonte Orientale - Facoltà di Economia ( email )

Via Perrone, 18
Novara, 28100
Italy

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