La Escuela de Derecho invita al seminario Global Hubs in the International Tax Regime: Theory and Evidence, presentación en español de Eduardo Baistrocchi.

El evento será online. 







Abstract: 

In A Global Analysis of Tax Treaty Disputes, we argued that countries are increasingly behaving like companies in the international tax regime (ITR) since the 1960s. Just as companies typically have the incentive to maximise their after-tax income, the theory goes, countries are usually prone to using their tax systems to maximise their inward investment. This paper aims to further elaborate the theory by focusing on non-G20 hubs to illuminate their role in the ITR during half a century (1960s-2000s). Non-G20 hubs are a group of countries that are in the business of connecting multinational enterprises (MNEs) with market jurisdictions, such as G20 countries, to minimise MNEs tax entry and tax exit costs. This paper is the first to offer an answer to the following two questions: 1) the extent to which it is possible to measure the level of concentration in the non-G20 hubs market; 2) why it can be inferred that there has been a diminishing concentration in the non-G20 hubs market since the 1990s, and, consequently, increasing competition between non-G20 hubs in an ecosystem in which any non-G20 hub has been able to enjoy market power since the 1990s. This paper uses as a case study the strategic interaction between G20 countries and non-G20 hubs in the area of tax treaty disputes. The case study is grounded on a new dataset covering all 494 leading tax treaty cases decided by G20 courts, typically involving intermediate entities located in non-G20 hubs, during half a century. The rise and decline of Switzerland as the superstar non-G20 hub from the 1960s to the 1980s, respectively, and the rise of the Netherlands as the new superstar non-G20 hub in the 1990s are used as an example. The theoretical framework is grounded on aspects of antitrust law, including the Hirfindahl-Hirschman index and the economics of superstars.