It’s been quiet on here because of a field trip in Thailand, Vietnam and Cambodia, of which more anon. In the meantime, I’ve been given the opportunity to present a paper based on a chapter of my thesis several times this autumn. It’s a historical study of the politics of Britain’s tax treaty negotiations. I presented it at the excellent African Tax Research Network conference earlier this month, where a few treaty negotiators told me it was interesting to see what goes (well, went) on behind the scenes on the other side. I’ll be giving it again at the Oxford University Centre for Business Taxation’s doctoral workshop, and as the papers there are posted online, I thought it might be time to post it here, too.
Here’s the abstract:
Why have developing countries concluded so many double taxation treaties with developed countries? Much existing research assumes that this diffusion results from the active pursuit of such treaties by developing countries, which have been willing to give up considerable taxing rights through them, in order to attract inward investment. This paper uses archival documents to examine treaty negotiations between the UK and developing countries during the 1970s. It finds that in many cases negotiations were in fact driven by the UK as a means of increasing the competitiveness of British firms in developing country markets. It also reveals a divide between the tax specialist community, for whom tax treaties were a project to export ‘acceptable fiscal standards’, and generalists in business and government, for whom they were a means of securing lower effective tax rates. When these two groups’ objectives came into conflict, it was generally the experts who determined the UK’s policy objectives.
Martin Hearson 