Optimal fiscal barriers to international economic integration in the presence of tax havens

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Optimal fiscal barriers to international economic integration in the presence of tax havens. / Johannesen, Niels.

I: Journal of Public Economics, Bind 96, Nr. 3-4, 2012, s. 400-416.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Johannesen, N 2012, 'Optimal fiscal barriers to international economic integration in the presence of tax havens', Journal of Public Economics, bind 96, nr. 3-4, s. 400-416. https://doi.org/10.1016/j.jpubeco.2011.12.008

APA

Johannesen, N. (2012). Optimal fiscal barriers to international economic integration in the presence of tax havens. Journal of Public Economics, 96(3-4), 400-416. https://doi.org/10.1016/j.jpubeco.2011.12.008

Vancouver

Johannesen N. Optimal fiscal barriers to international economic integration in the presence of tax havens. Journal of Public Economics. 2012;96(3-4):400-416. https://doi.org/10.1016/j.jpubeco.2011.12.008

Author

Johannesen, Niels. / Optimal fiscal barriers to international economic integration in the presence of tax havens. I: Journal of Public Economics. 2012 ; Bind 96, Nr. 3-4. s. 400-416.

Bibtex

@article{77d8636e48954995aca63b93f72571d0,
title = "Optimal fiscal barriers to international economic integration in the presence of tax havens",
abstract = "This paper develops a model where firms can shift profits to tax havens by means of intra-firm loans and countries can protect themselves against profit shifting by taxing cross-border interest flows. The model considers two countries with a scope for welfare improving economic integration. The first-best tax system has two important characteristics: (i) the tax rate on interest flows to the other country is zero to ensure the optimal level of economic integration; (ii) the tax rate on interest flows to tax havens is high enough to deter profit shifting to tax havens. In second-best environments, countries face a trade-off between economic integration and protection against tax havens, which causes protection to be suboptimally low. The key to the result is that economic integration makes it easier for multinational firms to circumvent taxes on interest payments to tax havens with conduit loans. The paper thus provides an explanation for the empirical puzzle that many countries do not tax interest payments to tax havens despite the scope for profit shifting",
keywords = "Faculty of Social Sciences, Tax competition, Profit shifting, Tax havens, Withholding taxes, Economic integration",
author = "Niels Johannesen",
year = "2012",
doi = "10.1016/j.jpubeco.2011.12.008",
language = "English",
volume = "96",
pages = "400--416",
journal = "Journal of Public Economics",
issn = "0047-2727",
publisher = "Elsevier",
number = "3-4",

}

RIS

TY - JOUR

T1 - Optimal fiscal barriers to international economic integration in the presence of tax havens

AU - Johannesen, Niels

PY - 2012

Y1 - 2012

N2 - This paper develops a model where firms can shift profits to tax havens by means of intra-firm loans and countries can protect themselves against profit shifting by taxing cross-border interest flows. The model considers two countries with a scope for welfare improving economic integration. The first-best tax system has two important characteristics: (i) the tax rate on interest flows to the other country is zero to ensure the optimal level of economic integration; (ii) the tax rate on interest flows to tax havens is high enough to deter profit shifting to tax havens. In second-best environments, countries face a trade-off between economic integration and protection against tax havens, which causes protection to be suboptimally low. The key to the result is that economic integration makes it easier for multinational firms to circumvent taxes on interest payments to tax havens with conduit loans. The paper thus provides an explanation for the empirical puzzle that many countries do not tax interest payments to tax havens despite the scope for profit shifting

AB - This paper develops a model where firms can shift profits to tax havens by means of intra-firm loans and countries can protect themselves against profit shifting by taxing cross-border interest flows. The model considers two countries with a scope for welfare improving economic integration. The first-best tax system has two important characteristics: (i) the tax rate on interest flows to the other country is zero to ensure the optimal level of economic integration; (ii) the tax rate on interest flows to tax havens is high enough to deter profit shifting to tax havens. In second-best environments, countries face a trade-off between economic integration and protection against tax havens, which causes protection to be suboptimally low. The key to the result is that economic integration makes it easier for multinational firms to circumvent taxes on interest payments to tax havens with conduit loans. The paper thus provides an explanation for the empirical puzzle that many countries do not tax interest payments to tax havens despite the scope for profit shifting

KW - Faculty of Social Sciences

KW - Tax competition

KW - Profit shifting

KW - Tax havens

KW - Withholding taxes

KW - Economic integration

U2 - 10.1016/j.jpubeco.2011.12.008

DO - 10.1016/j.jpubeco.2011.12.008

M3 - Journal article

VL - 96

SP - 400

EP - 416

JO - Journal of Public Economics

JF - Journal of Public Economics

SN - 0047-2727

IS - 3-4

ER -

ID: 36142382