Spillover effects in international taxation:a guiding framework for National analyses

Published on 
09/04/2017

ActionAid Denmark just published a new report about spillover effects in international taxation, in collaboration with ActionAid International. The report, titled “Stemming the spills” is available here in English.

“It is widely recognised that spillover effects are significant and sizable, and especially marked and important for developing countries. With this new report, ActionAid states,we analyse the existing experiences and research in this area and propose a guiding framework for national tax spillover analyses by EU member states with the aim of launching a debate on this important topic.”

“With so much potential revenue lost in developing countries, tax is central to the financing of the 2030 Agenda for Sustainable Development which all EU member states have committed to. Moreover, EU member states have committed to the concept of policy coherence for development (PCD), ensuring that impact on developing countries will be taken into account in all their policies, with taxation as one of the key areas. To make informed policy choices, EU member states need to analyse their tax policies to improve the understanding of their extraterritorial effects. For this reason, a number of actors, including the European Parliament, is calling for EU member states to conduct national tax spillover analyses to honour their international commitments.

ActionAid considers national tax spillover analyses key in achieving fair and responsible tax policies.

Specifying in advance the precise national mechanisms for spillover effects is difficult due to the country-specific context and dynamic multivariate nature of tax processes. Therefore, instead of presenting an exact model for national tax spillover analyses, this Guiding Framework presents recommendations for what elements future national tax spillover analyses should take into account in terms of method, scope and process.”

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