Faculty of Economics and Business Administration Publications Database

Anti-Tax-Avoidance Provisions and the Size of Foreign Direct Investment

Volume: 3
Number: 1
Pages: 67 - 81
ISSN-Print: 0927-5940
Year: 1996
Keywords: Multinational firm; Tax evasion; International taxation
Abstract: The article focuses on the principle adopted in the justification for tax exemption of foreign sovereigns in the U.S. The exemption from taxation of foreign sovereigns is based on the fundamental notions of comity and sovereign immunity, which do not cover commercial-related activities to avoid occurrence of unfair comparative advantage. It also states the need to expand the coverage of the Code Section 892 exemption to complement with the exemption suited to tax-exempt organizations. Further, it cites that adoption of harmonization has assured improvement of the international competitiveness of the capital market, assessment in the reducing balance of payment deficits and enhancement of capital import and capital export neutrality.