The Troubling Role of Tax Treaties

in Geerten M. M. Michielse & Victor Thuronyi, (eds.), Tax Design Issues Worldwide, Series on International Taxation, Volume 51 (Alphen aan den Rijn: Kluwer Law International, 2015), 159-178.

20 Pages Posted: 6 Aug 2015

See all articles by Kim Brooks

Kim Brooks

Dalhousie University - Schulich School of Law

Richard Krever

University of Western Australia Law School

Date Written: July 1, 2015

Abstract

The notional purpose of tax treaties is to prevent double taxation and tax evasion. The actual purpose is to reallocate taxing rights between an investor’s home jurisdiction (the residence state) and the host jurisdiction (the source state). The effect is to reduce or remove the taxing rights of a source state (a capital importing state) to leave more room for tax in the residence state (a capital exporting state). The revenue costs of agreeing to reduce taxing rights in a treaty are thought to be offset by other benefits. The benefits may be exaggerated. To the extent they may actually be realized, all can likely be achieved more efficiently through unilateral action by the source state.

Suggested Citation

Brooks, Kimberley and Krever, Richard, The Troubling Role of Tax Treaties (July 1, 2015). in Geerten M. M. Michielse & Victor Thuronyi, (eds.), Tax Design Issues Worldwide, Series on International Taxation, Volume 51 (Alphen aan den Rijn: Kluwer Law International, 2015), 159-178., Available at SSRN: https://ssrn.com/abstract=2639064

Kimberley Brooks

Dalhousie University - Schulich School of Law ( email )

6061 University Ave
Weldon Law Building
Halifax, Nova Scotia B3H4H9
Canada

Richard Krever (Contact Author)

University of Western Australia Law School ( email )

M253
35 Stirling Highway
Crawley, Western Australia 6009
Australia

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