Automatic Information Exchange versus the Withholding Tax Regime Globalization and Increasing Sovereignty Conflicts in International Taxation
World Tax Journal (IBFD), Vol. 5, No. 2, pp. 172 (2013)
43 Pages Posted: 3 Dec 2013 Last revised: 21 Sep 2017
Date Written: June 1, 2013
Traditionally, international tax law has predominantly concerned itself with the avoidance of double taxation. However, the increasing influence of globalization and digitalization on domestic tax systems has made improved international cooperation inevitable. At the crux of the matter is a question of design – what does efficient international cooperation look like? These days it looks like the deterrence effect of the automatic information exchange is the form of cooperation that is preferred by most governments and academics. Nevertheless, it is worth analysing the alternative model of the withholding tax regime proposed by the Swiss government. Comparing the pros and cons of the two models, this article concludes that automatic information exchange is better suited as a global standard. But, as the article explores, the competition between the two models reveals increasing sovereignty conflicts in international taxation. Sovereignty conflicts that will most likely increase with the automatic information exchange.
Keywords: Tax Sovereignty, Automatic Information Exchange, FATCA, Withholding Tax Regime, Rubik, EU Savings Tax
JEL Classification: H26, K34, K33, K39
Suggested Citation: Suggested Citation