Quotation Petkova, Kunka, Stasio, Andrzej, Zagler, Martin. 2020. On the relevance of double tax treaties. International Tax and Public Finance.




This paper investigates the effects of double tax treaties (DTTs) on foreign direct investment (FDI) after controlling for their relevance in the presence of treaty shopping. DTTs cannot be considered a bilateral issue, but must be viewed as a network. We define tax distance as the cost of channelling corporate income from one country to another and, by considering treaty shopping through intermediate jurisdictions, we calculate the shortest (i.e. the cheapest) distance between any two countries. We show 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%.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal International Tax and Public Finance
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, INF-A, STRAT-B, VW-D, WH-B
Language English
Title On the relevance of double tax treaties
Year 2020
Reviewed? Y
URL https://link.springer.com/article/10.1007/s10797-019-09570-9
DOI https://doi.org/10.1007/s10797-019-09570-9
Open Access Y
Open Access Link https://link.springer.com/article/10.1007/s10797-019-09570-9
JEL F21 F23; F53; H25; H26; H73; H87; K34


Petkova, Kunka (Former researcher)
Stasio, Andrzej (Former researcher)
Zagler, Martin (Details)
Research Institute for International Taxation FI (Details)
Department of Economics (Crespo Cuaresma) (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5311 Public finance (Details)
5341 Economic policy (Details)
5343 Economic theory (Details)
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