Proposed public policy framework: the UK’s tax treaty network
Tax treaties prescribe how countries can tax cross-border activities between the treaty partners. The way that such transactions are taxed is hugely important in a globalized world where cross-border trade is increasing at a fast pace. If a country is not able to tax such transactions properly, it risks losing out on vast amounts of tax revenue which in turn will greatly affect that country’s ability to fund public services and investments.
ActionAid UK is concerned about the lack of transparency and public accountability in the negotiation of tax treaties; but also about how the UK’s tax treaties with developing countries and conduit countries – i.e. a country whose laws and tax treaties means that income can be routed tax-free via that country between two other countries – deprive developing countries of invaluable tax revenue. We are therefore proposing principles for a public policy framework for how the UK should approach its current network of tax treaties, as well as future tax treaty negotiations.