Tax treaty shopping: structural determinants of Foreign Direct Investment routed through the Netherlands

@article{Weyzig2013TaxTS,
  title={Tax treaty shopping: structural determinants of Foreign Direct Investment routed through the Netherlands},
  author={Francis Weyzig},
  journal={International Tax and Public Finance},
  year={2013},
  volume={20},
  pages={910-937}
}
  • F. Weyzig
  • Published 2013
  • Economics
  • International Tax and Public Finance
Many multinationals divert Foreign Direct Investment (FDI) through conduit countries that have a favorable tax treaty network, to avoid host country withholding taxes. This is referred to as tax treaty shopping. The Netherlands is the world’s largest conduit country; in 2009, multinationals held approximately €1,600 billion of FDI via the Netherlands. This paper uses microdata from Dutch Special Purpose Entities to analyze geographical patterns and structural determinants of FDI diversion… Expand

Tables from this paper

Tax Treaties and Foreign Direct Investment: A Network Approach
Multinational investors often reduce tax on dividends by using indirect investment routes. This paper constructs a tax rate matrix to represent a real-world network of tax treaties between 70Expand
Optimal tax routing: network analysis of FDI diversion
The international corporate tax system is considered a network. Just like for transportation, “shortest” paths are computed, which minimize tax payments for multinational enterprises when theyExpand
Tax Treaty Networks and Ownership Structures of Multinational Corporations
Multinational corporations can organize indirect ownership chains with intermediate subsidiaries, such as foreign equity holding companies, in countries with low taxes and favorable tax treaties.Expand
Tax treaties and foreign direct investment: a network approach
Multinational investors often reduce tax on dividends by using indirect investment routes. This paper constructs a tax rate matrix to represent a real-world network of tax treaties between 70Expand
FDI Diversion : Tax Proximity , Tax Complexity and Regionalism-a Spatial Autoregressive Analysis
This paper investigates tax-motivated spatial interdependence in bilateral FDI. The vast majority of the empirical literature on the effects of host-country tax regimes on FDI relies on anExpand
The Foreign Investment Effects of Tax Treaties
We examine the impact of bilateral and multilateral tax treaties on bilateral FDI stocks. First, we present panel regressions of the effects of treaties on FDI based on an extensive database of allExpand
On the relevance of double tax treaties
TLDR
It is shown that relevant tax treaties—which reduce the direct tax distance both over domestic law and the entire existing treaty network—will increase FDI by about 18%, the shortest distance between any two countries. Expand
Inward FDI determinants: The Case of the Netherlands
The Netherlands is one of the largest receivers of FDI in the world. It is interesting to study as other small economies may benefit from such research. Using data for 17 investing countries, overExpand
The Effect of Tax Treaties on Market Based Finance: Evidence using Firm-Level Data
Tax arbitrage is often cited as a potential motive for the substantial growth and complexity of market based finance. Tax treaties are an important feature of the international tax system and can beExpand
A Legal and Economic Analysis of Austria's Double Tax Treaty Network with Developing Countries
To what degree developing countries gain from signing double tax treaties is being hotly debated. In this paper, we analyze the Austrian tax treaty policy. Combining legal and economic perspectives,Expand
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 47 REFERENCES
The Impact of Endogenous Tax Treaties on Foreign Direct Investment: Theory and Evidence
This paper investigates the effect of tax treaties on bilateral stocks of outward FDI. For this purpose we employ a numerically solvable general equilibrium model of trade and multinational firms toExpand
Dutch Bilateral Investment Treaties: A Gateway to ‘Treaty Shopping’ for Investment Protection by Multinational Companies
Multinational companies (MNCs) investing abroad have been using Dutch bilateral investment treaties (BITs) to sue host country governments for over 100 billion dollars for alleged damages to theExpand
The Impact of Double Taxation Treaties on Foreign Direct Investment: Evidence from Large Dyadic Panel Data
To increase inward foreign direct investment (FDI), policy makers increasingly resort to the ratification of double taxation treaties (DTTs). However, the effectiveness of DTTs in inducing higher FDIExpand
The Effect of Tax Treaties on Multinational Firms: New Evidence from Microdata
This paper uses affiliate level data from Swedish multinationals to examine the impact of tax treaties on both overall affiliate sales and the composition of those sales. In line with previousExpand
Host-country governance, tax treaties and US direct investment abroad
Abstract We investigate how the quality of the host-country governance and a bilateral US income tax treaty affect the rates of return that US companies require on their foreign direct investmentExpand
Do Bilateral Tax Treaties Promote Foreign Direct Investment?
We explore the impact of bilateral tax treaties on foreign direct investment using data from OECD countries over the period 1982-1992. We find that recent treaty formation does not promote newExpand
The Impact of Bilateral Investment Treaties and Double Taxation Treaties on Foreign Direct Investments
This is an empirical analysis upon the influence of investment agreements (multilateral and bilateral) and double taxation treaties (DTTs) upon foreign direct investment (FDI). A Gravity type andExpand
The Effects of Bilateral Tax Treaties on U.S. FDI Activity
The effects of bilateral tax treaties on FDI activity have been unexplored, despite significant ongoing activities by countries to negotiate and ratify these treaties. This paper estimates the impactExpand
Foreign Direct Investment and the Business Environment in Developing Countries: The Impact of Bilateral Investment Treaties
The effects of Bilateral Investment Treaties on FDI and the domestic business environment remain unexplored despite the proliferation of treaties over the past several years. This paper explores theExpand
Do double taxation treaties increase foreign direct investment to developing countries?
Abstract  Developing countries invest time and other scarce resources to negotiate and conclude double taxation treaties (DTTs) with developed countries. They also accept a loss of tax revenue asExpand
...
1
2
3
4
5
...