Tax Competition in the European Union

Dehejia, Vivek H.; Genschel, Philipp

doi:10.1177/0032329299027003005

Cited by 89 publications

(51 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This scenario reflects a symmetric PD. However, it is often asserted that both small and big countries have differing interests with regards to tax competition (Dehejia and Genschel, 1999). As declining tax rates are connected with large welfare losses for big countries, they are more interested in international coordination in order to prevent a race to the bottom of tax rates.…”

Section: Game Theory Frameworkmentioning

confidence: 99%

“…That is, based on the underlying assumptions, the choice between credit/exemption and deduction is represented not by a PD but rather by an assurance game, where more than one equilibrium is possible (ibid). So far, there is no 11 The characteristic feature of these games is that "the players have to assure each other of their rationality" (Rixen, 2008: 37 Dehejia and Genschel (1999), for instance, model tax competition as a "battle of the sexes" game. In their view, it is not so much defection that prevents international cooperation in the field of international taxation but rather distributional issues that make cooperation "controversial" (Dehejia andGenschel, 1999: 1044f).…”

mentioning

confidence: 99%

See 1 more Smart Citation

The Discrepancy between 'Ideal' and 'Real World' International Tax Rules - What Drives Politicians When Making the Rules?

Braun

2012

SSRN Journal

View full text Add to dashboard Cite

Section: Game Theory Frameworkmentioning

confidence: 99%

mentioning

confidence: 99%

The Discrepancy between 'Ideal' and 'Real World' International Tax Rules - What Drives Politicians When Making the Rules?

Braun

2012

SSRN Journal

View full text Add to dashboard Cite

“…e.g. Dehejia and Genschel 1999). Actually, in response to the problems of tax avoidance and "tax arbitrage" the OECD has initiated its "harmful tax practices project" that is the first broad multilateral effort at curbing tax evasion and avoidance (OECD 1998).…”

Section: Taxationmentioning

confidence: 99%

The Political Economy of Bilateralism and Multilateralism: Institutional Choice in International Trade and Taxation

Rixen

Rohlfing²

2005

SSRN Journal

View full text Add to dashboard Cite

“…(Rixen 2005). When additional economic differences besides tax rate differences are considered, it is argued that both small and big countries have conflicting interests with regard to tax competition (Dehejia and Genschel 1999). As declining tax rates are connected with large welfare losses for big countries, bigger countries are more interested in international coordination in order to prevent a race to the bottom of tax rates.…”

Section: Introductionmentioning

confidence: 99%

“…There are further examples where other games are used to analyse issues of international taxation. Dehejia and Genschel (1999), for instance, model tax competition as a "battle of the sexes" game. In their view, it is not so much defection that prevents international tax cooperation but rather distributional issues that make cooperation "controversial".…”

Section: Introductionmentioning

confidence: 99%

CCCTB: the employment factor game

Eberhartinger

Petutschnig

2015

Eur J Law Econ

View full text Add to dashboard Cite

The draft for a Common Consolidated Corporate Tax Base Directive in the European Union includes the suggestion for an apportionment formula which allocates taxable group profits to group member corporations. These allocated profits shall then be taxed in the respective MemberStates. The draft directive delegates the right to define one factor of the apportionment formula, the term 'Employee' to the Member States, who are therefore free to choose a narrow or a broad definition, the latter including also atypical employment schemes. Using a game-theoretic approach the paper shows that the individually rational strategy of any Member State to define 'Employee' broadly so as to maximize the volume of the apportionment factor and thus maximize the allocated share of taxable income is only the best solution when tax rate differences and differences in the volume of atypical employment schemes are disregarded. If such differentials and the corporate groups' reactions to different Member States' definitions are included in modelling the game's payoffs a narrow definition of 'Employee' yields the highest individual pay-offs to the Member States involved. This change of dominant strategies is triggered by the corporate group's shifting of the employment factor from high-tax to low-tax Member States. Our paper differs from previous research on the economic effects of the CCCTB apportionment formula as it is the first paper identifying and analysing the employment factor and its distorting effects. The paper discusses possible tax minimizing strategies for corporate groups by shifting workforce and develops a model to quantify these potential relocations. Furthermore the paper presents advice to policy makers in their 'Employee' definition decision and shows how Member States could use this definition to both minimize outward factor shifting and maximize inward factor shifting.

show abstract

Tax Competition in the European Union

Cited by 89 publications

References 0 publications

The Discrepancy between 'Ideal' and 'Real World' International Tax Rules - What Drives Politicians When Making the Rules?

The Discrepancy between 'Ideal' and 'Real World' International Tax Rules - What Drives Politicians When Making the Rules?

The Political Economy of Bilateralism and Multilateralism: Institutional Choice in International Trade and Taxation

CCCTB: the employment factor game

Contact Info

Product

Resources

About