Residence-based Capital Taxation: Why Information is Voluntarily Exchanged and why it is not
AbstractThe issue of capital tax competition in source-based capital taxes is viewed to be unproblematic if residence-based capital taxation exists. The sustainability, however, of residence-based capital taxation depends on the co-operation of source countries to assist in collecting tax revenues that benefit the residence country. We analyze conditions under which information about foreign savings are voluntarily exchanged. It turns out that information is voulntarily exchanged if the wage structure of the economy is not influenced by the size of the financial sector resulting in an efficient allocation with decentralized tax policies. In contrast, strategic incentives to withhold information may exist if the size of the financial sector has a positive impact on the wage structure of an economy.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 402.
Date of creation: 2000
Date of revision:
Tax competition; information exchange;
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- Marcel Gérard, 2002. "Interjurisdictional Company Taxation in Europe, the German Reform and the New EU Suggested Direction," CESifo Working Paper Series 636, CESifo Group Munich.
- Marcel Gérard, 2004. "Combining Dutch Presumptive Capital Income Tax and US Qualified Intermediaries to Set Forth a New System of International Savings Taxation," CESifo Working Paper Series 1340, CESifo Group Munich.
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