The Global Taxing Rights Database

Countries have negotiated over 4,000 BTTs to address the problem of double taxation. Capital and labor mobility generates overseas assets and income (via FDI and long-term services and employment) and cross-border payments (e.g., dividends), which may be taxed by both home and host (or “source”) states. A typical BTT covers these diverse types of income and capital as tax bases and mitigates double taxation by limiting the host state’s taxing rights—specifying whether the host state may tax each base, and if so, to what extent.

Host taxing rights vary across BTTs, leading to two key consequences. First, firms often re-route investment to take advantage of BTTs with lower host taxing rights, which may incentivize countries to negotiate BTTs with increasingly limited taxing rights. Second, international law and development experts have raised concerns that BTTs between developed and developing countries often disadvantage the latter. In such pairings, the developing country is typically the net capital importer and therefore the source of a larger tax base. Thus, a North-South BTT with limited host taxing rights likely constrains the developing country’s taxing authority to a greater extent.

I develop a comprehensive dataset on BTT host taxing rights, spanning all BTTs ever signed and all relevant tax bases. I hand-code 12 articles and 58 paragraphs across over 4,000 treaties. Existing datasets record only the host state’s maximum withholding tax rates on outbound dividend, interest, and royalty payments. These withholding taxes cover just 3 articles and do not determine the taxing rights prescribed in other articles. The database will be made publicly available once data cleaning is done.