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A Legal and Economic Analysis of Austria's Double Tax Treaty Network with Developing Countries

53 Pages Posted: 13 Nov 2014 Last revised: 14 Nov 2014

Julia Braun

Vienna University of Economics and Business - Department of Economics; Centre for European Economic Research (ZEW)

Daniel Fuentes

WU; Institute for Austrian and International Tax Law

Date Written: August 31, 2014

Abstract

To what degree developing countries gain from signing double tax treaties is being hotly debated. In this paper, we analyze the Austrian tax treaty policy. Combining legal and economic perspectives, we find that developing countries are likely to expect both positive and negative impacts from signing a double tax treaty (DTT) with Austria. On the one hand, the results of our econometric analysis suggest that middle-income countries that sign a DTT with Austria may expect an increased number of foreign direct investment projects from Austrian companies. On the other hand, the signatory states may suffer from limited withholding taxation rights established in the DTTs for the source country, which could lead to reduced tax revenues in the developing countries.

Keywords: double tax treaties, international tax policy, developing countries, international location decisions

JEL Classification: C25, F21, F23, F63, H25, H87, K34

Suggested Citation

Braun, Julia and Fuentes, Daniel, A Legal and Economic Analysis of Austria's Double Tax Treaty Network with Developing Countries (August 31, 2014). WU International Taxation Research Paper Series No. 2014 - 13. Available at SSRN: https://ssrn.com/abstract=2516308 or http://dx.doi.org/10.2139/ssrn.2516308

Julia Braun (Contact Author)

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

Welthandelsplatz 1
A-1020 Wien
Austria

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Daniel Fuentes

WU ( email )

Austria

Institute for Austrian and International Tax Law ( email )

Althanstrasse 39-45
A-1090 Wien
Austria

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