Tax Countries Research Articles

Deutschland ist kein Niedrigsteuerland - eine Replik auf den Beitrag von Hettich und Schmidt*und ein Beitrag zur (Er-)Klarung der Methoden zur Messung der Unternehmenssteuerbelastung

A recent article presents effective corporate tax burdens for a number of countries. Its authors conclude that Germany can be considered to be a low tax country by international comparison, and that a tax reform which aims at reducing the effective tax burden on German corporations is not necessary. In our paper, we critically review the method used for that study. In a second step, we present approaches which we assume to be better suited for such an analysis, and results generated by these approaches. We conclude that Germany cannot be considered to be a low tax country.

Deutschland ist kein Niedrigsteuerland – eine Replik auf den Beitrag von Hettich und Schmidt und ein Beitrag zur (Er-)Klärung der Methoden zur Messung der Unternehmenssteuerbelastung

A recent article presents effective corporate tax burdens for a number of countries. Its authors conclude that Germany can be considered to be a low tax country by international comparison, and that a tax reform which aims at reducing the effective tax burden on German corporations is not necessary. In our paper, we critically review the method used for that study. In a second step, we present approaches which we assume to be better suited for such an analysis, and results generated by these approaches. We conclude that Germany cannot be considered to be a low tax country.

Deutschland ist kein Niedrigsteuerland – eine Replik auf den Beitrag von Hettich und Schmidt und ein Beitrag zur (Er-)Klärung der Methoden zur Messung der Unternehmenssteuerbelastung

A recent article presents effective corporate tax burdens for a number of countries. Its authors conclude that Germany can be considered to be a low tax country by international comparison, and that a tax reform which aims at reducing the effective tax burden on German corporations is not necessary. In our paper, we critically review the method used for that study. In a second step, we present approaches which we assume to be better suited for such an analysis, and results generated by these approaches. We conclude that Germany cannot be considered to be a low tax country.

The Disappearing Tax Base: Is Foreign Direct Investment Eroding Corporate Income Taxes?

This paper analyzes the link between Foreign Direct Investment (FDI), corporate taxation, and corporate tax revenues. We find strong evidence that FDI in (out) flows are affected by tax regimes in the host (home) countries and FDI flows in turn affect the corporate tax base. Simulations of EU harmonization (isolating the revenue effect of FDI on the tax base from direct effects through the rate harmonization) suggest that high (low) tax countries would gain (lose) revenue from harmonization; these effects may be substantial. Our results also suggest that EU tax harmonization would significantly affect the net FDI position of some countries.

The Disappearing Tax Base: Is Foreign Direct Investment (FDI) Eroding Corporate Income Taxes?

This paper analyzes the link between FDI, corporate taxation, and corporate tax revenues. We find strong evidence that FDI in (out) flows are affected by tax regimes in the host (home) countries and FDI flows in turn affect the corporate tax base. Simulations of European Union (EU) harmonization (isolating the revenue effect of FDI on the tax base from direct effects through the rate harmonization) suggest that high (low) tax countries would gain (lose) revenue from harmonization; these effects may be substantial. Our results also suggest that EU tax harmonization would significantly affect the net FDI position of some countries.

The Disappearing Tax Base Is Foreign Direct Investment (FDI) Eroding Corporate Income Taxes?

This paper analyzes the link between FDI, corporate taxation, and corporate tax revenues. We find strong evidence that FDI in (out) flows are affected by tax regimes in the host (home) countries and FDI flows in turn affect the corporate tax base. Simulations of European Union (EU) harmonization (isolating the revenue effect of FDI on the tax base from direct effects through the rate harmonization) suggest that high (low) tax countries would gain (lose) revenue from harmonization; these effects may be substantial. Our results also suggest that EU tax harmonization would significantly affect the net FDI position of some countries.

Transfer Pricing, Double Taxation, and the Cost of Capital

The effects of double taxation are analysed when a multinational enterprise can shift profits by transfer pricing behaviour. It is shown that the well-known Hartman-Sinn neutrality result may not hold in this case. Surprisingly, an increase in the taxation of foreign dividends may lead to a lower cost of capital for the foreign subsidiary. I. Introduction In recent years there has been growing awareness that multinational firms can evade a large portion of their statutory tax burden by manipulating transfer prices in cross-border transactions.' One reason for shifting profits between jurisdictions using transfer pricing is the differences in corporate tax rates. By underpricing intra-company sales and overpricing intracompany purchases, a subsidiary located in a high tax country can increase the multinational's overall profit since the parent's gain in after-tax profit is higher than the subsidiary's net of tax loss. A second reason for setting

Value-added taxation in the EC after 1992: Some applied general equilibrium calculations

This paper examines the quantitative effects of the transitional system of value-added taxation for intra-EC trade between 1993 and 1997, as recently adopted by the ECOFIN-Council. First, the administration of the current destination principle and the interim solution are described. A short representation of the empirical general equilibrium model featuring seven EC regions and 14 production sectors follows. Finally, the effects of a switch to the transitional system are evaluated by using numerical simulations. The adopted provisions with regard to cross-frontier sales to final consumers open tax arbitrage possibilities which favour low tax countries at the cost of their EC partners. When decomposing welfare effects, international tax revenue shifts prove to dominate, while substitution effects have relatively little influence on economic welfare.

Optimal Taxation, Capital Mobility and Tax Evasion

The problem of capital flight and tax evasion is of paramount concern to many countries. The fear is that capital mobility may lead to capital flight from high to low tax countries in such large amounts that it deprives a nation of its tax base and, as a consequence, its welfare system. Today's international climate, where bank secrecy laws protect foreign investors' anonymity in addition to substantial differences in national tax rates, makes this fear a reality. Capital flight and tax evasion are also of concern from an equity as well as an efficiency point of view. To the extent that labor cannot evade taxation as easily as capital, labor is subject to higher effective tax rates than capital. The presence of capital flight therefore imposes a higher tax burden on immobile factors and creates inequality. Giovannini (1989) and Razin and Sadka (1991) have recently studied the welfare effects of capital flight. Both studies are undertaken from the extreme assumption that foreign savings cannot be taxed and hence, that tax evasion is undetectable and costless. Although evidence suggests that governments have difficulties taxing foreign source income, governments derive positive tax revenue from foreign source income. This paper thus adopts a different perspective. Capital flight and tax evasion are viewed as problems of tax enforcement. The purpose of the paper is to analyze the intertemporal savings decision of an individual who can allocate consumption between two periods by borrowing and lending abroad and domestically. It is assumed that foreign savings can evade taxation with a certain probability depending on the amount of money the government allocates to tax enforcement. Within this setting, we investigate how taxes on foreign and domestic savings should be set optimally, and how much money if any the government should allocate to tax enforcement.

Harmonizing heavy goods vehicle taxes in Europe: a British view

One of the biggest unresolved problems regarding the completion of the free internal transport market within the European community is the problem of harmonization of taxation on the road haulage industry. As the highest tax country, Britain might be expected to have to reduce its level of taxes as part of any harmonization. This paper considers the current methodology of the British Department of Transport regarding the allocation of the track and external costs of road transport, in the light of developments in methodology and experience elsewhere in Western Europe and North America. We find a number of reasons for believing that, far from overstating the marginal social cost of use of roads by the road haulage industry, the current British approach actually understates it. Thus any move towards harmonizing tax levels may reduce taxes in Britain at a time when they should be increasing. (A)

Poll Tax Country

Poll Tax Country

THE VALUE ADDED TAX AND DEVELOPING COUNTRIES

Journal Article THE VALUE ADDED TAX AND DEVELOPING COUNTRIES Get access Carl Shoup Carl Shoup Search for other works by this author on: Oxford Academic Google Scholar The World Bank Research Observer, Volume 3, Issue 2, July 1988, Pages 139–156, https://doi.org/10.1093/wbro/3.2.139 Published: 01 July 1988

The United Kingdom and Tax Havens: A Comparative Comment

The United Kingdom has new legislation on the taxation of Controlled Foreign Corporations.1 In January 1981 the U.K. Board of Inland Revenue published two consultative documents, one on Tax Havens and the Corporate Sector and the other on Company Residence, to xvhich comments were invited.2 The U.K. Government next authorized the publication of draft legislation with a view to further consultations. This was done by a document dated November 1981, in which the broad objective was stated to be to produce to counter international tax avoidance by U.K. Companies. The topics covered by the November 1981 draft were (i) company residence (chapter 1), (ii) tax haven companies (chapter 2), (iii) out of income by overseas subsidiaries to U.K. parent companies, referred to as upstream loans (chapter 3). There was substantial opposition to these proposals from the business and financial community, and a new document was issued in December 1982. This document proposed measures to counter the use of controlled foreign companies in low tax countries where avoidance of U.K. tax was the main, or one of the main, purposes of the activities. It contained draft clauses which would enable a charge to corporation tax to be imposed on certain U.K. companies with at least a 10% interest in foreign companies under U.K. control but resident in a low tax country.3 The Government decided not to proceed with a statutory definition of company residence, but stated an intention to bring forward specific measures to deal with arrangements which take advantage of the current company residence rules. It also de-