28 Pages Posted: 28 Aug 2017
Date Written: August 17, 2017
Can a WTO Member discriminate against foreign suppliers of services located in jurisdictions that refuse to share information with a government to permit it to determine if its nationals engage in tax evasion? Does it matter if the Member uses standards developed by an international body as the criterion for deciding whether to impose measures? In Argentina—Financial Services the WTO Appellate Body held that services from jurisdictions that share financial tax information may be different from services provided by jurisdictions that do not cooperate in supplying such information. It overruled a Panel finding that measures to increase taxes on financial transactions with non-cooperative jurisdictions were discriminatory. We argue that the AB reached to the right conclusion on the basis of the wrong arguments; that it missed an important opportunity to clarify what WTO Members are permitted to do to enforce their domestic regulatory regimes; and increased the scope for confusion and future litigation by considering that the likeness of services and service suppliers may be a function of prevailing domestic regulatory regimes.
Keywords: tax evasion; tax havens; international regulatory cooperation; information exchange, transparency
JEL Classification: F38, F51, G28, H26, H87
Suggested Citation: Suggested Citation
Delimatsis, Panagiotis and Hoekman, Bernard, National Tax Regulation, International Standards and the GATS: Argentina—Financial Services (August 17, 2017). TILEC Discussion Paper No. 2017-033. Available at SSRN: https://ssrn.com/abstract=3026094