fbpx

Working Paper

ICTD Working Paper 125

Tax Treaty Aggressiveness: Who is Undermining Taxing Rights in Africa?

Published on 1 July 2021

Tax avoidance strategies by multinational companies rely heavily on tax treaties.

Multinational companies can relocate financial activities across countries to ensure the applicability of the most beneficial tax treaties. This ‘treaty shopping’ can be particularly harmful to African countries, impairing their efforts for domestic resource mobilisation and achieving sustainable development goals.

In this paper, we analyse the aggressiveness of tax treaties towards African countries – the extent to which signing tax treaties reduces the taxing rights of African governments. We find that treaties signed with France, Mauritius and the United Arab Emirates reduce withholding tax rates the most, while treaties signed with European countries – and, in particular, the United Kingdom and France – greatly limit other taxing rights, for example, by restricting the scope of permanent establishment definition.

Cite this publication

Millán-Narotzky, L., García-Bernado, J., Diakité, M. and Meinzer, M. (2021) Tax Treaty Aggressiveness: Who is Undermining Taxing Rights in Africa? ICTD Working Paper 125, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2021.015

Citation copied

Authors

Lucas Millán-Narotzky
Javier García-Bernado
Maïmouna Diakité
Markus Meinzer

Publication details

published by
ICTD and IDS
journal
ICTD Working Paper 125
doi
10.19088/ICTD.2021.015
isbn
978-1-78118-833-0
language
English

Share

About this publication

Region
Africa

Related content