Tax Competition

Tax competition is a phenomenon that emerged because of the increasing mobilitiy of production factors, especially capital, between countries due to the globalization process.
The concept of tax burden; It is meaningful in terms of showing the share of the public economy in the national economy as well as being one of the development indicators of a country. Because infrastructure investments, which require large capital, especially in developing countries, the lack of private savings at the desired level, and the quality and accessibility of public services in parallel with this are the arguments that reveal the importance of the concept of tax burden. It is tried to be revealed with statistical data in the light of concepts such as equality and justice, factors such as the tax structure of that society, income distribution, and which segments of the society bear the tax burden in a country. Sociological approaches such as poverty and deprivation and social exclusion have been concepts that affect the economic policies of modern states in the context of the social rights and freedoms of today's individuals in the grip of globalization. Throughout this study, we will discuss the harmful and beneficial aspects of tax competition, the importance of tax competition, and the reasons for the tax burden caused by the effects of tax competition on Turkey among OECD countries.

A general equilibrium model is constructed to study tax competition, where local governments compete for capital by holding down property tax rates and public expenditure levels. An exact definition of tax competition is provided, and both the existence and nonexistence of tax competition are shown to be theoretically possible. It is argued, however, that tax competition must occur under empirically reasonable conditions. Inefficiency in public production is also explicitly modeled. The amount of capital used to produce a given level of public service output is shown to be greater than that which is required to minimize costs evaluated at the prices facing private firms.

Апстракт
Даночен рај нуди на странски инвеститори, правни и физички лица, ниски или никакви даночни обврски со дополнителна погодност да финансиските информации не се споделуваат со странски даночни служби. Даночен систем на една држава е начин на финансирање на државата , додека деградација на истиот, со нeплаќање и настојување на луѓето за избегнување на даночните обврски, поради можноста за едноставен и брз трансфер на капитал но и поради стабилниот правен систем, т.е преку давање на легалност на деловните операции, ги прави даночните раеви се попривлечни. Во овој труд ќе бидат бидат анализирани основите начела на даночните раеви како и специфичниот начин на работење преку истите, историскиот развој, улогата на Организацијата за економска соработка и развој во дефинирање на даночните раеви како и проблемот со даночната евазија која е присутна во истите. Клучни зборови: даночен рај, даночна евазија, offshore компании, деловни тајни, индекс на финансиска тајност

Abstract
Tax haven offers foreign investors, legal entities and individuals, low or no tax obligations with the additional convenience that financial information is not shared with foreign tax authorities. A state's tax system is a way of financing the state, while its degradation, by not paying and pushing people to evade taxes, also the possibility of simple and fast capital transfer and a stable legal system, i.e by giving the legality of business operations, makes tax havens more attractive. This paper will analyze the basic principles of tax havens as well as specific way of working through them, their historical development, the role of the Organization for Economic Cooperation and Development in defining tax havens, and the tax evasion problem that is present there.

Since the last decade of the 20th century, fiscal competition and tax havens have been the focus of attention of many policymakers all over the world. After the world financial crisis in 2008, those issues started to be perceived – together with tax cooperation and bank secrecy laws – as some of the most pertinent topics in the economic and financial discourse and even deemed partially responsible for financial crime and the crisis itself.

This paper provides an overview of modern fiscal competition topics, discussing its drawbacks and benefits for economic agents (consumers and firms) as well as governments. We start by defining the phenomenon of fiscal competition and describing its main characteristics. Next, we address the various aspects of its impact on economy based on the analysis of published papers handling the topic.
The notion of the tax haven is regarded in this essay as an instance of tax competition. After giving its definition, we discuss its qualities listing the aspects  of countries which could potentially become tax havens. After that, we discuss the pro and contra of tax havens which coincide in many ways with those proposed in the analysis of tax competition.

In this paper, we reference to published papers from Journal of Public Economics, Oxford Review of Economic Policy, National Tax Journal and other sources. The assumptions proving our opinion are thus based on the arguments expressed there which are based on the analysis of economic models and treatment of empirical data.

This thesis offers an account of the justification of democracy and its proper relationship with the market. It sets out a justification of democracy that I call impartial instrumentalism. According to this account, a political system is justified by its tendency to make good decisions. However, this should be assessed in a way that is impartial between substantive conceptions of justice. In practice, impartial instrumentalism recommends those political systems that promote the knowledge and moral motivation of decision-makers. Democracy is justified as the best political system according to this standard. My account contributes to debates about epistemic democracy by integrating considerations of motivation, and by clarifying the relationship between instrumental and epistemic justifications of democracy.

The second half of the thesis evaluates the relationship between markets and democracy in light of this account. I begin by asking whether democracies should be restricted in their ability to intervene in the market. I evaluate the most plausible contemporary argument for this, that of Ilya Somin. Somin’s argument does not meet the test of impartial instrumentalism, because he underrates the need for collective decisions and is not impartial between different conceptions of morality. Next, I ask how markets can influence democracy, and how we should respond to these influences. I examine two case studies: the funding of political speech, and capital strikes (situations in which governments retreat from policies out of fear of how markets will react). In both cases, markets can impede the proper working of democracy. For the former case, I propose a policy solution. However, the latter case raises unavoidable trade-offs between democracy and the economic benefits of trade.

In this thesis, I defend a normative account of constitutional design. On the basis of this account, I argue that democracy should generally have priority over the market. 

This article presents a history of international tax governance and offers a rationalist reconstruction of its institutional trajectory. As an unintended consequence of its institutional setup, the tax regime, which originally only dealt with double tax avoidance, endogenously produces harmful tax competition. Despite this negative effect there are only incremental and partial changes of the regime, which are insufficient to curb tax competition. I argue that this development can be explained by considering the properties – and the sequence in which they come up – of the collective action problems inherent in double tax avoidance and tax competition. First, in double tax avoidance, a coordination game with a distributive conflict, governments did not want to endanger the solution they had institutionalized long before tax competition became virulent. Second, governments are unable to resolve the emergent asymmetric prisoner’s dilemma of tax competition due to conflicts of interest among big and small country governments and successful lobbying of corporate capital. As a result, the institutional trajectory is characterized by the simultaneous occurrence of stability in the core principles and indirect and incremental changes of the rules in the form of rule stretching and layering.

The adoption of the common currency within a context of European fiscal systems diversity could lead to fierce tax competition. Capital income taxation is at stake. The fiscal gap on the corporate income tax between the European country is measured with the cost of capital concept. We find that it can be superior to 30%. In ail countries income from savings are nearly tax free for non resident thus providing a strong incentive to invest abroad. The European Commission propositions aim at minimising the potential effects of fiscal competition on fiscal deficits rather than focusing on economie efficiency. The

The paper deals with the problem of tax competition in the EU and its possible effect on tax policies. It includes a review of selected theoretical assumptions as well as an empirical analysis of available data. We focus our attention on corporate taxes, because of higher tax base mobility and the lack of almost any tax harmonization up to now. However, corporate tax harmonization is currently being intensively discussed question in EU. The time series analyses, as well as panel data regression, were used. On one hand, the results suggest that there is no evidence for spontaneous tax coordination caused by tax competition across all EU countries. On the other hand, we find evidence for interactions in the setting of corporate tax rates between neighbouring countries. A higher corporate tax rate in neighbouring countries generally implies a higher tax rate in the country itself. Our results also suggest that the level of corporate tax rate in the country could be also partly influenc...

ÖZET
Küreselleşme süreci yaşamın birçok alanını derinden
etkilemekte ve alışılagelmiş olan değer yargılarını her gün
yeniden dizayn etmektedir. Bu sürecin doğal sonucu olarak
devlet teşkilatı ve onun ekonomik, mali ve sosyal yaşamdaki yeri
de dönüşüme uğramaktadır. Nitekim küreselleşmenin hız
kazandığı dönem olarak kabul edilen 1980 sonrasında kamu
maliyesi uygulamalarında önemli değişimler meydana gelmiş ve
1973 Petrol Krizi öncesinin hakim iktisadi paradigması
durumundaki Keynesyen öğreti ve onun somutlaşmış hali olan
Refah Devleti’nin ekonomik ve mali uygulamaları geçerliliğini
büyük ölçüde yitirmiştir. Böylece bu çalışmada küreselleşme
sürecinin devletin mali fonksiyonlarında meydana getirdiği
değişim incelenmiştir. Çalışmanın kapsamı, küreselleşme
sürecinin hız kazandığı 1980 sonrasında hayata geçirilen kamu
mali uygulamaları ile sınırlandırılmıştır. Çalışma ile
küreselleşme süreci ve onun devletin mali uygulamalarında
meydana getirdiği dönüşümün ortaya konulması amaçlanmıştır.
Yöntem olarak hem tarihsel süreç analizi kullanılmış, hem de
sayısal verilerden yararlanılarak, kamu maliyesinde yaşanan
dönüşüm somut bir şekilde ortaya konulmaya çalışılmıştır.
Anahtar Kelimeler: Küreselleşme, Küyerelleşme,
Ulus Devlet, Mali Kurallar, Vergi Rekabeti

GLOBALIZATION ERA AND CONVERSION IN FISCAL
FUNCTIONS OF THE STATE

ABSTRACT
Globalization process deeply affects on many topics of
life and redesigns ordinary value judgements every day. As a
natural result of this process the state organization and its place
in economic, financial and social life is being transformed. Hence
 Gümüşhane Üniversitesi İİBF, [email protected]
3078
after 1980 when is considered that globalization accelerated in
this period, significant changes have occurred in public finance
practices. Also economic and fiscal applications of Keynesian
doctrine and Welfare State which were the dominant economic
and social paradigms before 1973 oil crisis, losted validity
considerably in globalization era. Thus in this work it is
examined that glabalization process and its effects on fiscal
functions of the state. Scope of the study is restricted with public
finance practices after 1980. Aim of this study is to reveal
globalization process and its affect on fiscal apllications. In this
study historical process analysis and numerical data are used as
method to display changing in public finance.
Key Words: Globalization, Glocalization, Nation State,
Fiscal Rules, Tax Competition.

This paper examines the effects of policy coordination in a two-country world with endogenous growth and imperfect capital mobility. Redistribution is financed by a source-based capital-income tax. Comparing the cases in which countries do and do not coordinate their fiscal policies, ...

Over the last two decades, industrialized countries have eliminated most remaining capital controls. The EU specifically abolished all restrictions on capital outflows by 1990, while common market principles guarantee EU firms the right of establishment in every Member State. ...

International tax competition is generally framed as states competing for foreign direct investment (FDI), and analyses of the phenomenon draw heavily on FDI statistics. In and of themselves, however, FDI statistics are merely a quantification of the value of investment projects and tell us little about the heterogeneity of these projects and the distinct patterns of competitive dynamics between countries they generate. In this article, we create a more sophisticated understanding of international tax competition by pointing out its variegated nature. To do so, we introduce the notion of the “great fragmentation of the firm” to distinguish between five categories of FDI: manufacturing affiliates, shared service centers, R&D facilities, intermediate holding companies and top holding companies. Using a novel combination of firm-level and country-level data, we identify for each of these different categories of FDI which European Union member states are most successful in attracting it, what macro-institutional and tax arrangements they use to do so, and what benefits they receive from it in terms of tax revenues and employment creation. In this way we were able to identify five distinct FDI attraction profiles and show that, rather than being a game of all against all, tax competition in the European Union increasingly takes place amongst subsets of countries that compete for similar categories of FDI.

There are issues challenging the validity of existing company tax regimes to better serve the principle of effective, efficiency, fairness and accountability of public interest. This has in turn lead to an initiative of company tax reform seeking new way to design a system that is promoting competitiveness and generating steady stream of tax revenues flow. Therefore, this study aimed to provide brief reviews of literatures in which discuss the emerging trends of company income tax in global and possible tax reforms. A comprehensive review of company tax bases and rates are then employed. Data that is depicting the trends of company tax rates across these years are then being overviewed, compared, and evaluated. The importance of company’s taxation, concept of company tax base and rates, trends and comparison of global income Tax, tax competition and tax reforms are reviewed. It can be concluded from the literature review that most of the trends in jurisdictions are reducing tax rates to demonstrate their competitive. Also, the global trade tax circumstances have varied radically over past few decades and impair the effectiveness of company taxation administration policies nowadays to remain competitive and generate sufficient incomes without disrupted by aggressive profit shifting. Therefore, future studies should explore areas like tax transparency and country to country reporting, unitary tax system and tax cooperation in order to ensure effective and efficient tax reforms.

This paper is part of a wider research on South and East Asian countries' taxation, carried out in this Department, under the direction of L. Bernardi, A. Fraschini and P. Shome, and under the supervision of. V. Tanzi. South and East Asia are a particularly fast developing world economic areas, and are becoming increasingly more economically integrated. These countries, however, are not homogenous, and are lacking in any supra -national Authority. The total fiscal pressure of South and East Asian countries looks somewhat low when compared to that of countries with a similar per-capita income, pertaining to other economic world areas. However, a smooth Wagner law is confirmed by the data so that fiscal pressure is destined somewhat to increase as growth continues. With regards to similar experiences of developing and transition countries, indirect taxes prevail over direct ones. Low tax wedges on labor improve efficiency, by inducing both the supply and demand of labor. The heavy burden on consumption lessens equity and increases welfare losses. Any further uniform analysis of South and East Asian countries' tax policy issues would be however quite fruitless. It is far better to consider tax policies issues which rise inside the whole area separately to those more specific to each cluster made up by similar countries. Intra-regional economic integration poses severe challenges to the tax structure in the Asian area. Three tax policy issues seem most problematic: the building of intra-countries' agreements on reducing trade tariffs; the sequential revenue consequences of reduction in foreign trade taxes; the increasing tax competition for FDI. Intra-countries clusters' tax policy issues differ from each other. In Japan and in S. Korea different choices have been made regarding the comprehensiveness of the PIT's basis, whose burden as a consequence ends up being more fairly distributed in S. Korea. The two countries are facing the common problem of an ageing population and consequentially, social contributions, and eventually VAT are being raised. Malaysia's direct taxes look higher than Thailand's, but this is only because of the taxation of oil companies. Thailand has adopted VAT, while Malaysia has not changed its traditional sales tax. Both the countries are engaged in the recovery of revenue by improving tax administration. Both in China and in India income tax is small and poorly redistributing. Also, India has just moved from a schedular to a comprehensive tax basis. VAT is well established in China, while it is just arriving in India, as a consequence of a long waited but challenging reform, especially regarding the tax relationships among levels of government. Taxing power is now more centralized in China, but this needs to be corrected in order to avoid a lack of accountability on the part of the provinces. JEL Classification numbers: H20, H24, H25, H29

This paper is part of a wider research on South and East Asian countries' taxation, carried out in this Department, under the direction of L. Bernardi, A. Fraschini and P. Shome, and under the supervision of. V. Tanzi. South and East Asia are a particularly fast developing world economic areas, and are becoming increasingly more economically integrated. These countries, however, are not homogenous, and are lacking in any supra -national Authority. The total fiscal pressure of South and East Asian countries looks somewhat low when compared to that of countries with a similar per-capita income, pertaining to other economic world areas. However, a smooth Wagner law is confirmed by the data so that fiscal pressure is destined somewhat to increase as growth continues. With regards to similar experiences of developing and transition countries, indirect taxes prevail over direct ones. Low tax wedges on labor improve efficiency, by inducing both the supply and demand of labor. The heavy burden on consumption lessens equity and increases welfare losses. Any further uniform analysis of South and East Asian countries' tax policy issues would be however quite fruitless. It is far better to consider tax policies issues which rise inside the whole area separately to those more specific to each cluster made up by similar countries. Intra-regional economic integration poses severe challenges to the tax structure in the Asian area. Three tax policy issues seem most problematic: the building of intra-countries' agreements on reducing trade tariffs; the sequential revenue consequences of reduction in foreign trade taxes; the increasing tax competition for FDI. Intra-countries clusters' tax policy issues differ from each other. In Japan and in S. Korea different choices have been made regarding the comprehensiveness of the PIT's basis, whose burden as a consequence ends up being more fairly distributed in S. Korea. The two countries are facing the common problem of an ageing population and consequentially, social contributions, and eventually VAT are being raised. Malaysia's direct taxes look higher than Thailand's, but this is only because of the taxation of oil companies. Thailand has adopted VAT, while Malaysia has not changed its traditional sales tax. Both the countries are engaged in the recovery of revenue by improving tax administration. Both in China and in India income tax is small and poorly redistributing. Also, India has just moved from a schedular to a comprehensive tax basis. VAT is well established in China, while it is just arriving in India, as a consequence of a long waited but challenging reform, especially regarding the tax relationships among levels of government. Taxing power is now more centralized in China, but this needs to be corrected in order to avoid a lack of accountability on the part of the provinces. JEL Classification numbers: H20, H24, H25, H29

RESUMO: Busca-se correlacionar a alegação de inconstitucionalidade da desvinculação das receitas da União (DRU) com o fenômeno da mutação constitucional, sob o prisma da transformação da es-trutura das receitas tributárias. De início, são apresentados alguns casos pendentes de julgamento pelo Supremo Tribunal Federal, o que evidencia a possibilidade de revisão de entendimento pela corte. A seguir, apresenta-se o histórico da DRU e os argumentos, favoráveis e contrários, relativos à contraposição dos direitos sociais em relação à desvinculação de receitas. Logo depois, dá-se destaque à eventual violação do pacto federativo pela DRU, sendo analisado, para tanto, o instituto da mutação constitucional. Por fi m, são indicados julgamentos em que o Supremo Tribunal Federal adotou o fenômeno da mutação constitucional, sendo demonstrado que esse instituto é válido e legítimo para uma futura análise da constitucionalidade da DRU.

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper evaluates the nature and extent of, and possible responses to, two of the central challenges that globalization poses for revenue mobilization in Sub-Saharan Africa (SSA): from corporate tax competition, and from trade liberalization. It does so using a new dataset with features needed to meaningfully address these issues: a distinction between resource-related and other revenues, and a disentangling of tariff from commodity tax revenue. Countries ' experiences vary quite widely, nonresource revenues have been essentially stagnant. Corporate tax revenues have held up, despite a reduction in rates and evidence of substantial base-narrowin...

What taxes to levy, and at what rate, is among the most important decisions governments face. These decisions determine the size of their budget, and who foots the bill. But states do not make decisions about taxations in a void. Tax policy has repercussions beyond borders, enticing companies and individuals from elsewhere to evade or avoid taxation they are currently subject to. For instance, companies or individuals may tax assets or activities in lower-tax locations even though the underlying economic activity takes place in a higher-tax location, or they may relocate to a lower tax jurisdiction altogether. Because relative tax rates matter for the decisions of companies and individuals where to tax assets 1* We are very grateful for written comments and feedback from Andreas Cassee, Peter Dietsch, Joachim Helfer, Martin O'Neill, Thomas Rixen, Kate Vredenburgh, Gabriel Wollner and two anonymous referees. We should mention that Peter Dietsch engaged with our article at various stages and each time provided extremely generous responses. We are grateful for the opportunity to present earlier versions of this article and receive productive feedback in the Colloquium for Political Philosophy at the Humboldt University Berlin, the Political Theory Workshop at the University of York and the Political Theory Workshop at the University of Hamburg. Marco Meyer gratefully acknowledges financial support from the Leverhulme Trust.

In this paper we explore the growing phenomenon of co-productions in the film industry from a Neo-Schumpeterian perspective. We argue that the rise of co-productions is part of a wider narrative of financial and institutional dynamics shaping the industrial organization in the film industry. We will explore this narrative by following the money -from highlighting the importance of film finance as the central risk distribution mechanism in the industry, to exploring financial innovations in the context of institutional change, to showing how production is increasingly driven both by a search for and an abundance of financial capital. JEL -codes: L16, L69, Z11

The sharing between national tax authorities of taxpayer-specific information has emerged over the last few years as a-probably 'the'-central issue in the formation of international tax policy. Yet this refocusing of the debate on international taxation-away from parametric tax coordination and towards strengthening information exchange-has gone largely unnoticed in the public finance literature. This paper gives an overview of this increasingly important area of international taxation, reviewing the key economic, legal and practical concepts and issues bearing on the analysis and implementation of information exchange, and providing an account of recent policy initiatives and emerging theoretical insights. JEL codes: H77; H87; F42

This paper uses a new economic geography model to analyze tax competition betweeen two countries trying to attract internationally mobile capital. Each government may levy a source tax on capital and a lump sum tax on fixed labor. If industry is concentrated in one of the countries, the analysis finds that the host country will gain from setting its source tax on capital above that of the other country. In particular, the host may increase its welfare per capita by setting a positive source tax on capital and capture the positive externality that arise in the agglomeration. If industry is not concentrated, however, both countries will subsidize capital.

*Level 5 (UG 2nd year) Module: Political Economy of Taxation. Mark: 73 (first)*

This essay argues that globalisation does not lead to a ‘race to the bottom’ in the revenue context of capital taxation, more specifically Corporate Income Tax. Based on the large-N quantitative study of 36 OECD countries between 1980 and 2018, despite empirical findings confirm the negative relationship between globalisation and CIT revenue as a % of GDP, no evidences were found regarding the ‘race to the bottom’ in terms of CIT revenue collected as a % of GDP and certainly not tended towards zero. On the contrary, majority (64%) of the OECD countries have seen their CIT revenue relative to GDP increased as well as the overall mean and median CIT revenue between 1980 and 2018 across all countries. Prior to reaching this conclusion, this essay starts by positioning the proposition - globalisation causes ‘race to the bottom’ within the existing literature concerning capital tax competition and outlines an alternative approach to the ‘race to the bottom’ hypothesis from a revenue perspective instead of analysing CIT rates. Then, I outline the methodology and dataset used in this study followed by a presentation of the regression results.

International tax competition undermines states' capacity for redistributive taxation. It is thus problematic from the point of view of both cosmopolitan and internationalist theories of justice. This paper examines the proposal of a fiscal policy constraint that prohibits tax policies if they are strategically motivated and harmful to effective fiscal self-determination internationally. I argue that we should opt for a more robust, preference-independent mechanism to prevent harmful tax competition instead. States should, as a matter of justice, accept global minimum tax rates on mobile tax bases.

Over the years, the OECD has quietly taken centre stage in international tax policy development. The influence of the OECD is evident in the shape of Australian international tax policy. More recently, Australia has discovered that it can, in turn, have some influence in the direction taken by the OECD. This article examines some aspects of these influences. At a different level, the federal/state relationship is becoming tenser in the face of increasing tax competition. The second part of this article explores whether there are any lessons for federal tax systems that can be drawn from the way the OECD and similar organizations have helped the development of international tax policy. It is argued that an independent facilitator of tax policy, legislation and administration may prove beneficial.

This paper analyses the development of taxes on corporate income in EU and G7 countries over the last two decades. We establish a number of stylised facts about their development. Tax-cutting and base-broadening reforms have had the effect that, on average across EU and G7 countries, effective tax rates on marginal investment have remained fairly stable, but those on more profitable investments have fallen. We discuss two possible explanations of these stylised facts arising from alternative forms of tax competition. First, governments may be responding to a fall in the cost of income shifting, which puts downward pressure on the statutory tax rate. Second, reforms are consistent with competition for more profitable projects, in particular those earned by multinational firms.

Switzerland is a showcase for the international impact and entanglement of national and even sub-national tax policies. Since the early 20 th century, Swiss tax policy has reached out beyond the national border and offered foreign companies and wealthy individuals alike a fiscal alternative to their homelands. Such tax incentives have, in the interplay with other economic and financial institutions, connected the domestic diversity of competing tax policies with an outer world that became an outpost of these entangled Swiss Worlds of Taxation. In the early 21 st century, the political leaders of this outer world and international organizations such as the OECD retaliate by setting the agenda for Swiss domestic tax reform. Some view current plurilateral or global tax initiatives such as the EU campaign against " harmful " tax practices, the new standard for automatic exchange on tax information, or the program against transfer pricing and tax evasion as useful instruments to re-restore the sovereignty of nation states towards the tax (non-)paying power of multinational enterprises and the globalized rich class. In the Swiss case though, the tale of " competing sovereignties " might be more than a resentful complaint by right-wing politicians and business interest groups. This paper tries to sketch some elements of the international Swiss tax policies.

When a multinational firm invests in a country, potential host states compete for the firm by offering firm-specific tax reductions. Critics blast such incentives for transferring rents to the firm without affecting the investment decision. In fact, these incentives are tied to the firm's use of domestic inputs and therefore affect output decisions. With positive interstate spillovers, a federal subsidy is necessary to reach the national optimum without tax competition. Competition reduces state taxes and the need for federal subsidies. Also, under competition, the firm locates efficiently. Therefore, tax competition does not always reduce national welfare. D

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper provides an updated overview of tax incentives for business investment. It begins by noting that tax competition is likely to be a major force driving countries' tax reforms, and discusses tax incentives as a possible response to this. This is complemented by other arguments for and against tax incentives, and by an illustrative analysis of different incentives using effective tax rates. Findings from the empirical literature on tax incentives are also presented. Based on the overview of theoretical and empirical findings, the paper then suggests a matrix of criteria to determine the usefulness of different tax incentives depending on a country's circumstances.

The multiple worlds of taxation approach highlights the complex interplay of competition, inequality, redistribution and harmonisation that arose from Switzerland's federalist tax policy. Fiscal federalism allowed for significant tax autonomy of the Swiss cantons which compete for international capital and companies. Since 1959, the federal state increased its role in mediating tensions arising from different tax rates and revenues with a system of equalisation and redistribution. In the 1960s, international attacks on Swiss tax havens added to domestic tax justice concerns that yielded to demands for harmonization and less competition in the early 1970s. By the early 1980s, the fiscal agenda was set by liberals and their preference for subsidiarity again. Since the mid-1990s, globalisation favoured a generalization of the tax competition paradigm even at the federal state’s level with a series of company tax reforms. The competition paradigm has not excluded an expansion of welfare entitlements and infrastructure spending, partly relying on the value-added tax (VAT) adopted in the early 1990s. Lately, the Swiss worlds of taxation were forced into complying with international tax standards set by the OECD, EU, and the G-20-countries who seek to rule out “harmful” tax practices and to reaffirm market justice.

The Internet has not only changed the way business is conducted but also raised issues such as Internet taxation that are awaiting to be resolved. Taxes are the major sources of financing for governments, which in turn, use them to provide public goods and services. Thus, each government has its own tax policies imposed on taxpayers within its boundaries. The Internet, on the other hand, diminishes the boundaries set forth by governments as well as dematerialising money, products and taxpayers which constitute the basis for taxation, making tax collection even more difficult than ever. Uncertain rules regarding the taxation of the Internet pose a crucial problem that calls for all governments to collaborate for a uniform solution. Unless there is a global perspective on the issue, the governments will be confronted with greater tax evasion, a larger underground economy and fiercer tax competition from other countries. As put forth by the OECD, the U.S. and the European Union, the co...

Abstract
The reduction of the barriers to move factors of production in live with globalization has been a rationale for competition in foreign capital gains, especially underdeveloped and developing countries.  This competition is observed especially in corporate taxation and is realized by offering various tax advantages. Dominant view in the literature is that tax competition will have beneficial effects while the harmful effects are much more observed. In this study, we tried to determine the existence of tax competition by examining the indicators such as the statuory tax rates, effective tax rates, tax bases, the ratio of corporate income to GDP and share in total tax revenue OECD countries.  The main conclusion reached in the study is that the tax policies imposed by OECD countries have led to a tax competition. Our study indicate OECD has been successful in tackling with harmful tax competition.
Keywords                          : Tax Competition, Statutory Tax Rate, Effective Tax Rate, Foreign Direct İnvestments
JEL Classification Codes : F21, H20, H87 
Öz
Küreselleşmeyle birlikte hareketli üretim faktörlerinin önündeki engellerin erimesi özellikle az gelişmiş ve gelişmekte olan ülkeleri yabancı sermaye yatırımları konusunda rekabete sürüklemiştir. Bu rekabet özellikle kurumlar vergisi üzerine kendisini göstermekte ve çeşitli vergisel avantajlar sunularak gerçekleştirilmektedir. Literatürde vergi rekabetinin faydalı etkiler yaratacağı görüşü var olmakla birlikte, hakim olan görüş zararlı etkilerinin daha fazla olduğu yönündedir. Bu çalışmada OECD ülkelerinde kanuni ve efektif vergi oranları, vergi tabanlarının değişimi, kurumlar vergisi gelirlerinin GSYİH’ya oranı ve yine kurumlar vergisi gelirlerinin toplam vergiler içerisindeki payı gibi çeşitli göstergeler incelenerek vergi rekabetinin varlığına ilişkin bulgular sunulmaya çalışılacaktır. Çalışmada ulaşılan temel sonuç, OECD ülkelerinin uyguladıkları vergi politikalarıyla vergilemede bir rekabete yol açtığıdır. Çalışmamız zararlı vergi rekabeti ile mücadelede OECD’nin çalışmalarının başarılı olduğunu belirlemektedir.
Anahtar Sözcükler        : Vergi Rekabeti, Kanuni Vergi Oranı, Efektif Vergi Oranı, Doğrudan Yabancı Yatırımlar

JT00129276 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format ECO/WKP(2002)18 Unclassified English text only ECO/WKP(2002)18 2 ABSTRACT/RÉSUMÉ Enhancing the effectiveness of public spending in Switzerland

This paper tackles the issue of international fiscal coordination in a world of integrated markets sovereign national governments. Taxation of mobile capital and immobile labor in order to finance a public good generates inefficient fiscal competition. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. We

Vergi sistemini basitleştirmek, zararlı vergi rekabeti ile mücadele etmek ve vergi hâsılatını artırmak
için son zamanlarda birçok ülke tarafından kullanılmaktadır. Öte yandan, düz oranlı vergi sistemi, uy
gulamalar neticesinde olumlu sonuçlar vermiş ve özellikle vergi hasılatının artmasında etkili olmuştur
Vergilemede adalet yönünden eleştirilen düz oranlı vergi sistemi, içerisine eklenebilecek çeşitli araç
larla artan oranlılık özelliği göstererek vergilemede adaleti kısmen de olsa sağlayabilecektir.
Anahtar Kelimeler: Düz oranlı vergi, vergi hasılatı, vergilemede adalet, zararlı vergi rekabeti

ABSTRACT
Flat rate taxation has been recently used by many jurisdictions with a view to simplifying the tax
system, fighting against harmful tax competition and increasing tax revenue. Flat rate tax system,
nevertheless, has been fairly successful at raising tax revenue as a result of applications. Flat rate tax
system which is criticised for being unjust, may in fact provide tax justice partially once furnished by
various instruments thereby having attributes of progressive rate system.
Key Words: Flat rate tax, tax revenue, justice in taxation, harmful tax competition

Anfang der 90er Jahre war man sich unter Sozialwissenschaftlern einig, dass die Vollendung des Binnenmarktes zu erheblichem Wettbewerb zwischen den Mitgliedstaaten führen werde (statt vieler Gatsios/Seabright 1989; Giovannini 1989; Scharpf 1994; Sinn 1995). Je freier sich Güter, Dienstleistungen, Kapital und Personen über nationale Grenzen hinweg bewegen dürften, desto einfacher würden sie sich auch unliebsamen Regulierungen und Steuern durch Abwanderung entziehen können. Die Abwanderungsdrohung wiederum werde die nationalen Regierungen zwingen, Regulierungen und Steuern zu senken, um wirtschaftliche Aktivität im Land zu halten oder ins Land zu locken. Das Ergebnis, so fürchteten viele und hofften manche, werde eine Aufweichung regulativer Standards und eine chronische Unterfinanzierung des Wohlfahrtsstaates sein.

Resumo: A partir da definição do critério da territorialidade para incidência do imposto sobre a propriedade de veículos automotores – IPVA e da demonstração da importância do local do registro do veículo para fins de cobrança, o artigo analisa a disputa empreendida pelos Estados e Distrito Federal por recursos tributários decorrentes desse imposto, de modo a verificar, diante do atual quadro normativo, o que pode ser objeto de controle e questionamento legítimo pelos entes envolvidos.

Palavras-chave: Imposto sobre a propriedade de veículos automotores – IPVA; territorialidade; registo; domicílio; guerra fiscal.

Abstract: Based on the definition of the criterion of territoriality for taxing the ownership of motor vehicles – IPVA and after demonstrating the importance of the local of registration of the vehicle for collecting purposes, the article analyzes the struggle undertaken by the States and the Federal District for resources arising from this tax, in order to verify, under the current legislative framework, what can be subject to control and legitimate questioning by the entities involved.

Keywords: Tax on the ownership of motor vehicles - IPVA; territoriality; register; domicile; tax competition.

This paper explores the economic consequences of proposed EU reforms for a common consolidated corporate tax base. The reforms replace separate accounting with formula apportionment as a way to allocate corporate tax bases across countries. To assess the economic implications, we use a numerical CGE model for Europe. It encompasses several decision margins of firms such as marginal investment, FDI decisions, and multinational profit shifting. The simulations suggest that consolidation does not yield substantial welfare gains for Europe. The variation of effects across countries is large and depends on the choice of the apportionment formula. Consolidation with formula apportionment does not weaken incentives for tax competition. Tax competition instead offers a rationale for rate harmonisation, in addition to base harmonisation.

La constitution approuvée en 1978 a transformé la structure territoriale de l'État espagnol. En un peu moins de vingt ans, le modèle unitaire et fortement centralisé s'est transformé en un modèle dans lequel une part très importante des dépenses publiques sont de fait décentralisées. L'Espagne n'est pas un État fédéral au sens propre du terme, mais en pratique, l' « État des Autonomies » est en passe d'en devenir un. Cette marche vers la décentralisation est concomitante à une forte augmentation des dépenses publiques, fruit du développement de l'État providence. La transition vers la démocratie a également libéré les demandes de services publics accumulées durant quarante ans de dictature. En quelques années, les niveaux des dépenses publiques et de pression fiscale ont nettement convergé vers la moyenne de l'Europe communautaire. Les réformes récentes concernant le financement des Communautés autonomes (CCAA) en 2002, et des collectivités locales en 2003 vont paradoxalement dans un sens différent. La réforme de l'échelon régional a pour but de rapprocher le domaine de compétences des différentes CCAA et de combler en partie « le déséquilibre vertical » existant entre la relative décentralisation des dépenses et la relative centralisation des recettes fiscales. À l'inverse, la réforme concernant le système de financement du secteur public local (hors CCAA) introduit plus d'asymétrie dans le système, notamment entre communes de petite et de grande taille. Les compétences et les flux financiers gérés par les CCAA dépassent désormais ceux de certains pays fédéraux. Cependant, si on laisse de côté les CCAA forales (Navarre et Pays Basque), elles n'ont jusqu'en 2002 que peu utilisé l'autonomie fiscale dont elles jouissent potentiellement, ce qui restreint la portée des externalités horizontales et verticales de nature fiscale. En même temps, les politiques de péréquation sont très efficaces. Au niveau local, les collectivités locales utilisent davantage leur marge de manoeuvre fiscale, ce qui se traduit par l'existence d'externalités horizontales, tant du côté des dépenses que de celui des recettes. Le système de péréquation est moins efficace qu'au niveau des CCAA, ce qui implique l'existence de différences significatives dans les ressources par tête hors emprunt pour des communes qui pourtant ont les mêmes compétences obligatoires.