How to Design a Regional Tax Treaty and Tax Treaty Policy Framework in a Developing Country

Kiyoshi Nakayama

No 2021/003, IMF Fiscal Affairs Department from International Monetary Fund

Abstract: A well-designed regional tax treaty to which developing countries are signatories will include provisions securing minimum withholding taxes on investment income and technical service fees, a taxing right in respect of capital gains from indirect offshore transfers, and guarding against-treaty shopping. A tax treaty policy framework—national or regional—that specifies the main policy outcomes to be achieved before negotiations commence would enable developing countries with more limited expertise and lower capacity for tax treaty negotiations to avoid concluding problematic tax treaties. This note provides guidance for members of regional economic communities in the developing world on what should and should not be included in a regional tax treaty and how to design on a common tax treaty policy framework for use in negotiations of bilateral tax treaties with nonmembers.

Keywords: value-added tax; corporate tax; regional tax; regional tax policy; regional tax treaty; developing countries; tax treaty; group treaty negotiations; tax treaty position; treaty negotiations; treaty shopping; Double taxation; Withholding tax; Payroll tax; Corporate income tax; Dividend tax; Caribbean; West Africa (search for similar items in EconPapers)
Pages: 26
Date: 2021-05-04
New Economics Papers: this item is included in nep-pbe and nep-pub
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