International VAT/GST Guidelines

Interesting Guidelines by the OCDE: http://www.law.uconn.edu/news/events/itax/vat.pdf

The Demand for Tax Haven Operations

The Demand for Tax Haven OperThe Demand for Tax Haven Operations

Mihir A. Desai
Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

C. Fritz Foley
Harvard Business School; National Bureau of Economic Research (NBER)

James R. Hines Jr.
University of Michigan at Ann Arbor Law School; National Bureau of Economic Research (NBER)


March 2005

Abstract:
What types of firms establish tax haven operations, and what purposes do these operations serve? Analysis of affiliate-level data for American firms indicates that larger, more international firms, and those with extensive intrafirm trade and high R&D intensities, are the most likely to use tax havens. Tax haven operations facilitate tax avoidance both by permitting firms to allocate taxable income away from high-tax jurisdictions and by reducing the burden of home country taxation of foreign income. The evidence suggests that the primary use of affiliates in larger tax haven countries is to reallocate taxable income, whereas the primary use of affiliates in smaller tax haven countries is to facilitate deferral of U.S. taxation of foreign income. Firms with sizeable foreign operations benefit the most from using tax havens, an effect that can be evaluated by using foreign economic growth rates as instruments for firm-level growth of foreign investment outside of tax havens. One percent greater sales and investment growth in nearby non-haven countries is associated with an 1.5 to two percent greater likelihood of establishing a tax haven operation.
Keywords: Tax havens, tax competition, foreign direct investment, transfer pricing, investment, multinational firms
JEL Classifications: H87, F23, F21
Working Paper Series
Date posted: September 21, 2004 ; Last revised: February 03, 2006
Suggested Citation
Desai, Mihir A., Foley, C. Fritz and Hines Jr., James R.,The Demand for Tax Haven Operations(March 2005). Available at SSRN: http://ssrn.com/abstract=593546 or DOI: 10.2139/ssrn.593546
ations
Mihir A. Desai (Harvard Business School and National Bureau of Economic Research), C. Fritz Foley (Harvard Business School and National Bureau of Economic Research) and James R. Hines Jr. (University of Michigan and National Bureau of Economic Research) published this report at March 2005.

Here is the Abstract:

What types of firms establish tax haven operations, and what purposes do these operations serve? Analysis of affiliate-level data for American firms indicates that larger, more international firms, and those with extensive intrafirm trade and high R&D intensities, are the most likely to use tax havens. Tax haven operations facilitate tax avoidance both by permitting firms to allocate taxable income away from high-tax jurisdictions and by reducing the burden of home country taxation of foreign income.

The evidence suggests that the primary use of affiliates in larger tax haven countries is to reallocate taxable income, whereas the primary use of affiliates in smaller tax haven countries is to facilitate deferral of U.S. taxation of foreign income. Firms with sizeable foreign operations benefit the most from using tax havens, an effect that can be evaluated by using foreign economic growth rates as instruments for firm-level growth of foreign investment outside of tax havens. One percent greater sales and investment growth in nearby non-haven countries is associated with an 1.5 to two percent greater likelihood of establishing a tax haven operation.

Available at SSRN: http://ssrn.com/abstract=593546 or DOI: 10.2139/ssrn.593546

International Organisations, Blacklisting and Tax Haven Regulatory Reform

Sharman, Jason. "International Organisations, Blacklisting and Tax Haven Regulatory Reform" Paper presented at the annual meeting of the International Studies Association, Le Centre Sheraton Hotel, Montreal, Quebec, Canada, Mar 17, 2004
Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: This paper seeks to evaluate the relative success of exclusionary or coercive strategies versus inclusionary or consensual strategies employed by international organisations in securing tax haven states' compliance with new global financial regulations. In 1998 the G7 launched several related regulatory initiatives designed to tame tax competition, counter money laundering and shore up international financial stability.

These initiatives were premised on a 'top-down' or exclusionary approach, whereby standards were set in closed fora and diffused to small tax haven states by blacklisting and sanctions. This approach was intended to yield quick results and avoid 'lowest common denominator' standards. Almost six years later, this paper argues that international organisations such as the OECD significantly over-estimated their ability to secure the unwilling compliance of even the smallest tax haven states. As a result, more traditional inclusionary strategies based on sovereign equality and consensus now seem just as likely to be effective in setting global standards. Evidence is predominantly taken from the OECD's 'harmful tax competition' initiative, but also includes that body's campaign against the illicit use of corporate vehicles, the Financial Action Task Force, the Financial Stability Forum, the IMF Offshore Audit and the International Taxation Dialogue.