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What do we know about corporate tax competition?

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  • Michael Devereux

    ()
    (Oxford University Centre for Business Taxation)

  • Simon Loretz

    ()
    (University of Bayreuth)

Abstract

We review the empirical literature on competition in source-based taxes on corporate income. Drawing an analogy to the competition models for the goods market indicates how evidence for the existence of tax competition can be provided, and highlights that tax competition can take many forms. With this in mind we classify the empirical literature, and highlight the importance of the measurement of tax rates and openness. Using measures based on the statutory tax system, there is evidence for tax competition mostly in the European Union. In contrast to the view of Gordon (1992) small countries appear to be the leader of the tax competition game.

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Bibliographic Info

Paper provided by Oxford University Centre for Business Taxation in its series Working Papers with number 1229.

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Date of creation: 2012
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Handle: RePEc:btx:wpaper:1229

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Keywords: Tax competition; Corporate Taxation;

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References

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Cited by:
  1. Bauer, Christian & Langenmayr, Dominika, 2011. "Sorting into Outsourcing: Are Profits Taxed at a Gorilla's Arm's Length?," Discussion Papers in Economics 12312, University of Munich, Department of Economics.
  2. Jolanta Galuszka, 2013. "The Fiscal Union as a Remedy For the Economic and Financial Crisis in the European Union," Equilibrium, Uniwersytet Mikolaja Kopernika, vol. 8, pages 49-67.
  3. Oscar Amerighi & Giuseppe De Feo, 2013. "Competiton for FDI and profit shifting: on the effects of subsidies and tax breaks," Working Papers 1326, University of Strathclyde Business School, Department of Economics.
  4. Baskaran, Thushyanthan & Lopes da Fonseca, Mariana, 2013. "The economics and empirics of tax competition: A survey," Center for European, Governance and Economic Development Research Discussion Papers 163, University of Goettingen, Department of Economics.

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