Journal Press India^®

Author Details ( * ) denotes Corresponding author

In the past few decades, the prime considerations for FDI like degree of openness are becoming more or less same for all economies. It is the policy factors like taxation which have now become significant for investment decisions. In this respect one of the major issues is double taxation. This paper attempts to cover various aspects in relation to double taxation including tax treaties, unilateral and bilateral relief and above all the benefits and cost associated with signing a tax treaty. The review of literature conducted in respect of developed, developing and OECD nations highlights few important aspects in the context of Double Taxation Avoidance Treaties: age of treaty, treaty renegotiation, influence of regional peers and the country specific factors like income. This paper also discusses the case of India-Mauritius tax treaty which has been a debatable issue for long.

Keywords

Double Taxation Avoidance Agreements, Renegotiation, Opposing Effect, Double Taxation Relief

1. Baistrocchi, E. (2008). The Use and Interpretation of Tax Treaties in the Emerging World: Theory and Implications. British Tax Review, 4.
2. Baker, P.L. (2012). An Analysis of Double Taxation Treaties and their Effect on Foreign Direct Investment. International Journal of the Economics of Business, 21(3), 341-377.
3. Bhasin, N. (2014). The Impact of Fiscal Policy on Foreign Direct Investment Inflows: A Study of India and Select Asian Economies. Vision: Journal of Indian Taxation, 1(1), 74-97.
4. Blonigen, B. & Davies, R. (2000). The effects of bilateral tax treaties on U.S. FDI activity. Working Paper No. 7929, National Bureau of Economic Research, Cambridge. doi: 10.3386/w7929.
5. Blonigen, B. & Davies, R. (2003).The effects of bilateral tax treaties on U.S. FDI activity. Economics Department Working Paper.
6. Blonigen, B. & Davies, R. (2002).  Do Bilateral Tax Treaties Promote Foreign Direct Investment? Working Paper No. 8834, National Bureau of Economic Research, Cambridge. doi: 10.3386/w8834.
7. Blonigen, B., Oldenski, L.& Sly, N. (2011). Separating the opposing effects of bilateral tax treaties. Working Paper No. 17480., National Bureau of Economic Research, Cambridge. doi: 10.3386/w17480.
8. Davies, R. (2003). Tax Treaties, Renegotiations, and Foreign Direct Investment. University of Oregon Economics Department Working Paper. Retrieved on 28 December 2014 from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=436502
9. Di Giovanni, J. (2005). What drives Capital Flows: The Case of Cross-border M&A Activity and Financial Deepening? Journal of International Economics, 65, 127-149.
10. Louie, H.J. & Rousslang, D.J. (2007). Host-country governance, tax treaties and US direct investment abroad. International Tax and Public Finance,15, 256–273.doi: 10.1007/s10797-007-9020-5.
11. Lejour, A. (2014).The Foreign Investment Effects of Tax Treaties.CPB Discussion Paper. Retrieved on 02 January 2015 from ideas.repec.org: https://ideas.repec.org/p/cpb/discus/265.html.
12. Millimet, D.L. (2007). Reassessing the effects of bilateral tax treaties on US FDI Activity. Retrieved on 4 January 2015 from ideas.repec.org: https://ideas.repec.org/p/smu/ecowpa/704.html.
13. Murthy, K.V. B.  & Bhasin, Niti (2014). The impact of bilateral tax treaties: A multi-country analysis of FDI inflows into India. Journal of International Trade and Economic Development. doi:10.1080/09638199.2014.960442.             
14. Murthy, K.V. B. & Bhasin, N. (2013). The impact of bilateral tax treaties on FDI inflows: The case of India. Retrieved on 31 December 2014 from SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2234966.
15. Neumayer, E. (2006). Do Double Taxation Treaties Increase Foreign Direct Investment to Developing Countries? London School of Economics, Working paper.
16. Ohno, T. (2010). Empirical Analysis of International Tax Treaties and Foreign Direct Investment.  Policy Research Institute, Ministry of Finance, Japan, Public Policy Review, 6(2).
17. Organization for Economic Cooperation and Development. (www.oecd.org/tax/treaties)
18. Quere, A.B., Fontagne,L. & Revil, A.L. (2005) .How Does FDI React to Corporate Taxation? International Tax and Public Finance, 12, 583–603.
19. UNCTAD (United Nations Conference on Trade and Development). 2002. World Investment Report, Transnational Corporations and Export Competitiveness.
20. UNCTAD (United Nations Conference on Trade and Development). 2011. World Investment Report, Non-equity Modes of International Production and Development.
21. UNCTAD(United Nations Conference on Trade and Development). 2013. World Investment Report, Global Value Chains: Investment and Trade for Development