draining development.pdf - Khazar University

The Role of Transfer Pricing in Illicit Financial Flows 26333. This behavior by taxpayers and the suggested policy response are broadly consistentwith economic models of tax evasion (following the work on the economicsof crime by Nobel laureate economist Gary Becker and the tax evasionmodel of Allingham and Sandmo), which contend that the level of evasion ofincome tax depends on the level of punishment provided by law. The suggestionherein extends this notion to the practice of tax avoidance.34. For some developing countries, a key obstacle to effective implementation ofinformation sharing is the lack of the capacity required to determine what informationshould be requested from other countries and also to make proper andtimely use of the information received.ReferencesAltshuler, R., and H. Grubert. 2006. “Governments and Multinational Corporationsin the Race to the Bottom.” Tax Notes 110 (8): 459–74.Avi-Yonah, R. S. 2007. “Tax Competition, Tax Arbitrage and the International TaxRegime.” Working Paper 07/09, Oxford University Centre for Business Taxation,Oxford.Baistrocchi, E. 2005. “The Transfer Pricing Problem: A Global Proposal for Simplification.”Tax Lawyer 59 (4): 941–79.Bartelsman, E. J., and R. M. W. J. Beetsma. 2003. “Why Pay More? Corporate TaxAvoidance through Transfer Pricing in OECD Countries.” Journal of Public Economics87 (9–10): 2225–52.Christian Aid. 2009. “False Profits: Robbing the Poor to Keep the Rich Tax-Free.”Christian Aid Report, March, Chr istian Aid, London.Clausing, K. A. 2003. “Tax-Motivated Transfer Pricing and US Intrafirm TradePrices.” Journal of Public Economics 87 (9–10): 2207–23.Desai, M. A., C. F. Foley, and J. R. Hines Jr. 2006. “The Demand for Tax Haven Operations.”Journal of Public Economics 90 (3): 513–31.Fuest, C., and N. Riedel. 2009. “Tax Evasion, Tax Avoidance and Tax Expenditures inDeveloping Countries: A Review of the Literature.” Report, Oxford UniversityCentre for Business Taxation, Oxford.GAO (U.S. Government Accountability Office). 2008. “Tax Administration: Comparisonof the Reported Tax Liabilities of Foreign- and U.S.-Controlled Corporations,1998–2005.” Report GAO-08–957 (July 24), GAO, Washington, DC.http://www.gao.gov/products/GAO-08-957.Gordon, R., and W. Li. 2009. “Tax Structures in Developing Countries: Many Puzzlesand a Possible Explanation.” Journal of Public Economics 93 (7–8): 855–66.Haufler, A., and S. Stöwhase. 2003. “Taxes as a Determinant for Foreign Direct Investmentin Europe.” CESifo DICE Report 4 (2): 45–51, CESifo Group, Munich.Horman, Chitonge. 2010. “Zambia’s Development Agreements and the Soaring CopperPrices.” Resource Insight 11 (September 29), Southern Africa Resource Watch,Johannesburg.