Erratum for Supply chain strategies and international tax arbitrage

Over the past decade, international tax governance has evolved with bewildering speed in response to the challenges of digitalization and widespread corporate tax avoidance. Since the launch of the Group of 20 (G20)-Organisation for Economic Co-operation and Development (OECD) base erosion and profit shifting (BEPS) initiative in 2012, 135 countries and 14 international organizations have joined the BEPS Inclusive Framework, committing to implement new global standards on corporate tax, which has already been lauded as a revolution in the architecture of international tax law and policy. Even further expanding the scope of the OECD’s work on international taxation in a landmark announcement in March 2021, the U.S. administration further proposed imposing a global minimum corporate tax at a rate of 21% to be implemented through an international agreement by mid-2021. If the new OECD initiative is agreed, will the plan to implement a minimum corporate tax be fully implemented by G20 members, and if so, will it do enough to address the tax challenges of digitalization embodied in corporate tax arbitrage? Although the evidence suggests legislative and public policy compliance is likely to be high among G20 members, this article argues the minimum tax initiative is unlikely to go far enough to address deficiencies in global tax dispute resolution, which are extremely germane to the success of the proposed minimum tax. As explained in this article, U.S. leaders and global policymakers must enhance the mutual agreement procedure (MAP), a cornerstone of tax dispute resolution, given a growing body of tax litigation in investment law that threatens the implementation of BEPS 2.0. To do so, global policymakers must also reconcile the conflict of norms between tax sovereignty and investor protection contained in the investor-state dispute settlement (ISDS) regime. Only by addressing the conflict between the principles of tax sovereignty and investor protection can they prevent a tidal wave of investor disputes that will challenge the implementation of the minimum tax through national tax laws.

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International tax arbitrage via corporate income splitting

Quantitative Finance ◽

10.1088/1469-7688/2/2/302 ◽

2002 ◽

Vol 2 (2) ◽

pp. 111-115 ◽

Cited By ~ 2

Author(s):

Satish Chand

Keyword(s):

Tax Arbitrage ◽

International Tax

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International tax arbitrage, tax evasion and interest parity conditions

Research in Economics ◽

10.1006/reec.2001.0264 ◽

2001 ◽

Vol 55 (4) ◽

pp. 413-427 ◽

Cited By ~ 8

Author(s):

Frank Strobel

Keyword(s):

Tax Evasion ◽

Tax Arbitrage ◽

Interest Parity ◽

International Tax

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A Literature Review of Taxes in Cross-Border Supply Chain Modeling: Themes, Tax Types and New Trade-Offs

Journal of theoretical and applied electronic commerce research ◽

10.3390/jtaer17010002 ◽

2021 ◽

Vol 17 (1) ◽

pp. 20-46

Author(s):

Dong Mu ◽

Huanyu Ren ◽

Chao Wang

Keyword(s):

Supply Chain ◽

Literature Review ◽

Distribution Channel ◽

Channel Structure ◽

Tax Policies ◽

Cross Border ◽

Trade Offs ◽

Wide Range ◽

International Tax ◽

The Impact

The e-commerce platforms have facilitated the information flow of cross-border supply chain (CBSC) and attracted a wide range of companies and individuals to participate in cross-border businesses. The tax costs associated with cross-border commodity flow have received unprecedented attention. However, there is a lack of common platforms between international tax planners and CBSC optimizers, and the impact of various tax policies on CBSC operations is still unclear. To fill this gap, this study presents a literature review to elaborate on the interface between taxes and CBSC operations. First, a literature collection approach is constructed, and 71 pertinent publications are identified. Then, a four-dimensional categorization consisting of supply chain themes, research methodologies, tax types, and illustration types was designed to classify and summarize the research content of the selected articles. The results show that (1) there are six main supply chain-related themes, i.e., the supply chain network, the distribution channel structure, product quantity and quality, production outsourcing, the procurement mode, and supply chain emissions, that are significantly affected by taxes. (2) Four types of taxes, including the corporate income tax (CIT), tariffs, environmental taxes and the value-added tax (VAT), have obvious impacts on CBSC operations. (3) Four mainstream methodologies, i.e., mathematical models, empirical models, conceptual models and simulation models, have been applied to explore the tax effects in CBSC modeling. (4) The tax-saving opportunities in CBSC operations mainly come from the following five areas: CIT rate gaps in different regions, special tax regulations such as the tax cross-credit principle and arm’s length principle, regional trade agreements (RTAs), preferential tax policies and export VAT rebate policy. Finally, this research provides a framework to analyze the trade-offs between taxes and traditional CBSC modeling factors. The results can support enterprises in CBSC in dealing with the complex international tax policies.

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