A special tax zone (STZ) is a preferential tax regime that is ring-fenced. A preferential tax regime is ring-fenced when the sponsoring country effectively protects its domestic economy from the harmful effects of its own tax breaks. The protection of the domestic economy is generally achieved either by excluding the resident taxpayers from taking advantage of the tax benefits or by prohibiting the beneficiaries from operating in the domestic market
Publication Information & Recommended Citation
Avi-Yonah, Reuven S. "Special Tax Zones and the World Trade Organization." Martin Vallespinos, co-author. In Special Tax Zones in the Era of International Tax Coordination, edited by Pasquale Pistone, Jan de Goede, and Antti Laukkanen, 127-56. Amsterdam: IBFD, 2019.