European Journal of Law and Economics

, Volume 42, Issue 3, pp 383–404 | Cite as

Tax treaties with developing countries and the allocation of taxing rights

  • Dimitri PaoliniEmail author
  • Pasquale Pistone
  • Giuseppe Pulina
  • Martin Zagler


Worldwide income taxation in the country of residence is a legal dogma of international taxation. We question this dogma from the perspective of relations between developed and developing countries from legal and economic perspectives, and make a modern and fair proposal for tax treaties. We show under which conditions a developing and a developed country will voluntarily sign a tax treaty where the developing country is more inclined to share the information with the developed country and whether they should share revenues. Moreover, we demonstrate how the conclusion of a tax treaty can assist in the implementation of a tax audit system in the developing country.


Developing countries Tax treaties Exchange of information Revenue sharing Cost sharing International tax justice 

JEL Classification

F53 H25 H87 D82 



We would like to thank J. Braun, M. Dirkis, A. Gautier, C. Marchese and T. Pietra, the conference participants at IIPF, SIEP, SIDE-ISLE, at seminars at the Catholic University of Milan and at CRENoS-DEIR of the University of Sassari for helpful comments and suggestions. Paolini gratefully acknowledges financial support of MIUR-PRIN 2008 and from FNR (Measure AM2c), Luxembourg. Pistone and Zagler would like to acknowledge funding from the Austrian Science Fund (FWF) SFB international tax coordination. Zagler would like to acknowledge financial support from OeNB Jubiläumsfonds Projekt Nr. 16017 and thank CRENoS and DEIR (Università di Sassari) for their hospitality while working on this project.


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Dimitri Paolini
    • 1
    • 2
    Email author
  • Pasquale Pistone
    • 3
    • 4
    • 5
  • Giuseppe Pulina
    • 6
  • Martin Zagler
    • 7
    • 8
  1. 1.CRENoS & DiSEAUniversità di SassariSassariItaly
  2. 2.COREUniversité catholique de LouvainLouvain-la-NeuveBelgium
  3. 3.DISESUniversity of SalernoSalernoItaly
  4. 4.Institute for Austrian and International Tax LawWU Vienna University of Economics and BusinessViennaAustria
  5. 5.IBFDAmsterdamThe Netherlands
  6. 6.CREAUniversity of LuxembourgLuxembourgLuxembourg
  7. 7.Department of EconomicsWU Vienna University of Economics and BusinessViennaAustria
  8. 8.DiSEIUPO University of Eastern PiedmontAlessandriaItaly

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