Too high a price? Tax treaties with investment hubs in Sub-Saharan Africa

Sebastian Beer () and Jan Loeprick
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Sebastian Beer: International Monetary Fund

International Tax and Public Finance, 2021, vol. 28, issue 1, No 5, 113-153

Abstract: Abstract This paper investigates the costs and benefits of concluding double tax treaties with investment hubs. Based on a sample of 41 African economies from 1985 to 2015, the results suggest that signing treaties with investment hubs is not associated with additional investments; yet, these treaties tend to come with non-negligible revenue losses. Building on a theoretical model, the paper investigates the role of treaty shopping in driving nominal investment flows and provides indirect evidence for its importance in the sample.

Keywords: Tax treaty policy; Double tax treaties; Domestic resource mobilization; Investment hubs; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: F21 F23 H25 H26 H32 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10797-020-09615-4

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