 Estimating the revenue costs of tax treaties in developing countriesThe World Economy, 2019, vol. 42, issue 6, 1828-1849 Abstract: (12764) Petr Janský Marek Šedivý Tax treaties between countries influence how much tax revenues governments receive from multinational enterprises. These treaties often reduce the withholding tax rates on outgoing dividend and interest payments. We provide illustrative estimates of costs for these two taxes for 14 developing countries in sub‐Saharan Africa and Asia in a first multi‐country comparison of this kind. These might be overestimates because we assume that foreign direct investments are not influenced by the tax treaties. We estimate that the highest potential tax revenue losses are within hundreds of millions US$ and around 0.1% of GDP, with Philippines incurring the highest losses both in US$ and relative to GDP. We also find that around 95% of the losses is due to dividends and that only four investor countries—Japan, Netherlands, Switzerland and Singapore—are together responsible for more than half of the losses. We discuss the limitations of these estimates and how future research could improve their quality as well as coverage. Date: 2019 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:42:y:2019:i:6:p:1828-1849 Ordering information: This journal article can be ordered from Access Statistics for this article The World Economy is currently edited by David Greenaway More articles in The World Economy from Wiley Blackwell |
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