Dre-ler (2012) and Weyzig (2013) come to similar conclusions: to follow the group structures of multinationals in 58 countries in 1996-2008 and to analyze the tax efficiency of these structures, Dre-le shows that the level of withholding tax between two members of the group is important in determining the probability of indirect participation. Weyzig (2013) uses microdata of Dutch securitization vehicles to analyze the geographical patterns and structural determinants of ING deviation. It notes that tax treaties are an important determinant for FDI transiting through the Netherlands, with the reduction of basic dividend rates being a driving force. NOTE: The exemption/reduction in Iceland under the current agreements can only be achieved if the Director of Internal Revenue requests an exemption/reduction on Form 5.42. Until there is an exemption allowed with the number one registered, you have to pay taxes in Iceland. The Floyd-Warshall algorithm calculates total taxes on the indirect route, taking into account only nominal taxes in the intermediate zones. Assuming that the country of origin reduces double taxation through the indirect solvency method, while the intermediate court releases foreign dividends. According to the Floyd Warshall algorithm, the country of origin does register the underlying corporate tax with the full nominal tax rate. However, the actual tax rate on intermediate court dividends is 0%. van`t Riet and Lejour (2018) solve this problem by replacing the nominal corporate tax rate in an intermediate jurisdiction with an average global corporate tax rate.

When a bilateral DTT is disadvantaged by an indirect route with a single, irrelevant intermediate jurisdiction, LETN1, that contract does not affect foreign direct investment in the country of origin. It is quite possible that a structure of a channel is typical of the reference category (no contract) and it is therefore not possible to distinguish this case from an irrelevant contract. In the meantime, tax agreements, which are penalized only in relation to an indirect route with two intermediate zones, have a considerable positive impact on foreign direct investment. This allows complex and expensive structures to be avoided in a more simple way directly as soon as a DTT is available. While the N2 non-relevance coefficient is higher than that of RelevantOTN, this difference is statistically insignificant. A DBA (double taxation agreement) may require that the tax be levied by the country of residence and that it be exempted in the country where it is created. In other cases, the resident may pay a withholding tax on the country where the income was collected and the taxpayer receives a compensatory tax credit in the country of residence to take into account the fact that the tax has already been paid. In the first case, the taxpayer (abroad) would declare himself non-resident. In both cases, the DBA may provide for the two tax authorities to exchange information on these returns. Because of this communication between countries, they also have a better view of individuals and businesses trying to evade or evade tax. [4] 4. In the event of tax disputes, agreements can provide a two-way consultation mechanism and resolve the issues in dispute.

We expand each of our models (1) to (7) with both network variables. Footnote 24 Surprisingly, none of them proves significant.

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