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The UK’s tax treaties with developing countries during the 1970s

Hearson, Martin (2017) The UK’s tax treaties with developing countries during the 1970s. In: Harris, Peter and de Cogan, Dominic, (eds.) Studies in the History of Tax Law. Studies in the History of Tax Law. Hart Publishing, Oxford, UK. ISBN 9781509908370

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Tax treaties between developed and developing countries impose considerable costs on the latter, in the form of curbs on their right to tax investment from the former. Existing research assumes that such restrictions are accepted as a quid pro quo for resolving the problem of double taxation, which might act as an obstacle to inward investment. This paper uses archival documents to examine treaty negotiations between the United Kingdom (UK) and developing countries during the 1970s, focusing on contentious provisions concerning ‘tax sparing’, the taxation of shipping, and withholding taxes. Consistent with critical literature on tax treaties, it finds that neither side was concerned about the double taxation problem, which was resolved unilaterally by the UK’s tax credit. Rather, developing countries were primarily focused on obtaining matching tax credits in the UK to maximise the benefits to investors from their tax incentives. UK priorities, meanwhile, were to bind developing countries into OECD-type tax treatment of British firms. Negotiated outcomes did not reflect the true balance of costs and benefits to each side, but their different negotiating capacities, the political salience of particular taxes, and the precedent certain concessions might set for future negotiations

Item Type: Book Section
Official URL:
Additional Information: © 2017 Hart Publishing
Divisions: International Relations
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
J Political Science > JZ International relations
Sets: Departments > International Relations
Date Deposited: 21 Apr 2017 13:10
Last Modified: 24 Aug 2021 23:28

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