RT Journal Article
T1 Tax sparing clauses as a policy instrument of developing countries. Evidence from the Latin-American tax treaty network
A1 Navarro Ibarrola, Aitor
AB Developing   countries   frequently   grant   corporate   income   tax   incentives in order to attract foreign direct investment. To secure the effectiveness  of  these  measures  at  a  cross-border  level,  tax  sparing  clauses secure a notional credit at residence, meaning a discount on the  taxes  due  even  if  no  or  lower  taxes  were  paid  at  source.  These  clauses  prevent  the  home  country  of  the  investor  from  taxing  that  income,  allowing  the  investor  to  retain  the  tax  spared  by  the  host  country. This contribution examines the rationale of tax sparing and conducts  an  examination  of  the  issue  from  the  perspective  of  the  Latin-American  tax  treaty  network  -comprising  more  than  250  treaties-  to  draw  relevant  conclusions  from  the  analysis  of  the  specific clauses included in these agreements.
PB Umeå University
SN 2002-7788
YR 2021
FD 2021-04-08
LK https://hdl.handle.net/10016/37697
UL https://hdl.handle.net/10016/37697
LA eng
NO Special Issue: International Tax Challenges for Developing Countries
NO The present contribution was partially drafted during a research stay at the Max Planck Institute in Munich and under the framework of the research project DER2017-85333-P titled "Post-BEPS international taxation. Are the new rules and proposals suitable for every jurisdiction?" funded by the Spanish Ministry of Economy. The author acknowledges and appreciates this institutional support.
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