National Tax Regulation, International Standards and the GATS: Argentina—Financial Services

Panagiotis Delimatsis and Bernard Hoekman

No 2017/42, RSCAS Working Papers from European University Institute

Abstract: 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 the right conclusion but that an important opportunity was missed to clarify what WTO Members are permitted to do to enforce their domestic regulatory regimes, and how international standards could have a bearing on this question. By giving consideration to arguments that the likeness of services and service suppliers may be a function of prevailing domestic regulatory regimes, the AB increased the scope for confusion and future litigation.

Keywords: tax evasion; tax havens; international regulatory cooperation; information exchange; transparency (search for similar items in EconPapers)
JEL-codes: F38 F51 G28 H26 H87 (search for similar items in EconPapers)
Date: 2017-09
New Economics Papers: this item is included in nep-acc, nep-iue and nep-pbe
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