Identification of conduit jurisdictions and community structures in the withholding tax network

Tembo Nakamoto () and Yuichi Ikeda ()
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Tembo Nakamoto: Graduate School of Advanced Integrated Studies in Human Survivability
Yuichi Ikeda: Graduate School of Advanced Integrated Studies in Human Survivability

Evolutionary and Institutional Economics Review, 2018, vol. 15, issue 2, No 15, 477-493

Abstract: Abstract Due to economic globalization, international tax avoidance has emerged as a well-known global issue. To contribute to providing the solution of international tax avoidance, we tried to investigate which part of the network is vulnerable. Specifically, focusing on treaty shopping, which is one of the international tax avoidance schemes, we attempt to find which jurisdictions are likely to be used for treaty shopping from the viewpoint of tax rates and reveal the relationships between jurisdictions used for treaty shopping and the others. For that purpose, based on withholding tax rates imposed on dividends, interest, and royalties, we produced the withholding tax network expressed as weighted graphs, computed the centralities and detected the communities. As a result, we identified the jurisdictions used for treaty shopping and pointed out that there are community structures. The results of our study suggested that fewer jurisdictions need to introduce more regulations for the prevention of treaty shopping worldwide.

Keywords: International taxation; International tax avoidance; Network analysis (search for similar items in EconPapers)
JEL-codes: F69 H26 K34 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s40844-018-0111-z

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