Maya Forstater

I think the word “is” bestows the status of fact to what, in the end, remains academic research? The study is very short. It also doesn’t seem to identify the possible tax lost, commensurate with “dodging”. @MForstater @DanNeidle

The study doesn't identity tax dodging . It identifies that FDI intermediated through SPVs results in weirdness in the bilateral FDI statistics. To call this "phantom FDI" and tax dodging is sexing up the findings I think!

It seems to catch holding companies, regardless of whether there is profit shifting. But I can’t find the paper so cannot confirm this.

how hard would it be to 1. write down a list of non-tax reasons for using a holdco 2. sift through a random sample of them to see how many look like those, or look like they exist to reduce taxes? (the answer could be: very hard. Too hard to unpick)

Happy to discuss in more detail @robertnpalmer . I think the main point you are missing is that if a US MNC wants to expand into Europe, it will use a HoldCo for commercial reasons, and will site that HoldCo in NL or Lux in order not to add tax cost. 2/n

In my view it’s not “tax dodging” to put a commercial function (HoldCo) in a location which has a good treaty network and a participation exemption. But it does distort FDI stats, which the paper (sensibly) seeks to address. 3/3

Oh and PS - if an SPV is being used for “tax-dodging” it will almost certainly be ineffective to reduce wht rates, under local (source) rules, relevant DTA or the MLI. And CbCR means source, intermediate and residence state can find the info.