IBT 8: Cross-Border Services + Regulation of IBT
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41 Terms
what is a service in international trade?
an intangible economic output
what sector do services belong to?
tertiary sector
give examples of international services
consulting, banking IT, legal services
what is Mode 1?
cross-border supply, service crosses border, not people (online consulting)
what is Mode 2?
consumption abroad, consumer travels (tourism, studying abroad)
what is Mode 3?
commercial presence, company establishes abroad (subsidiary, branch)
what is Mode 4?
presence of natural persons, individuals travel to provide service
what is GATS ?
WTO treaty regulating trade in services
GATS ?
General Agreement on Trade in Services
what are GATS objectives?
liberalization, fair rules, transparency
GATS date ?
1995
what are key GATS principles?
most favored nation, national treatment
what is the freedom to provide services in the EU?
right to offer services across EU borders
what are article governs this freedom?
art.56 TFEU
what is the difference with establishment?
services = temporary
establishment = permanent
what principles apply in the EU?
non-discrimination, market access, mutual recognition
is there a global legal system for IBT?
no regulation is fragmented
which law applies?
mainly host country law
what is a tax?
mandatory contribution to government
what is direct tax?
income, property, surtax
what is indirect tax?
VAT, sales tax
what is VAT?
tax on value added at each stage
what is double taxation?
same income taxed twice
why is double taxation a problem?
discourages international business
solutions?
tax treaties like OECD model
what is tax evasion?
illegal
what is tax avoidance?
legal optimization but controversial
what are export controls?
law restricting export of goods/services/technology
why do states impose export controls?
national security, foreign policy, prevent weapons spread
what are dual-use goods?
civilian + military use
what is corruption?
abuse of power for private gain
examples of corruption?
bribery, fraud, embezzlement
what is extraterritoriality?
law apply outside the country
what is the Foreign Corrupt Practices Act?
US law prohibiting bribery abroad
what is the UK Bribery Act?
strict anti-corruption law (even for foreign firms)
a consultant provides advice via Zoom internationally. This is:
mode 1
a student goes abroad to study. This is:
mode 2
which is TRUE about GATS?
WTO agreement
double taxation means:
same income taxed twice
which is illegal?
tax evasion
Which provision of EU law defines what constitutes a “service” as an economic activity provided for remuneration, not covered by the free movement of goods, capital or persons?
Art. 57 TFEU