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Welfare Effects of Distortionary Company Car Taxation

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  • Eva Guti�rrez-i-Puigarnau

    ()
    (VU University Amsterdam)

  • Jos van Ommeren

    ()
    (VU University Amsterdam, and Frisch Center, Oslo)

Abstract

In Europe, company cars are offered by employers as fringe benefits to their employees at a lower price than employees pay in the car market, mainly due to favourable taxation of company cars. We analyse the welfare effects of favourable taxation of company cars for the Netherlands. The estimated annual welfare costs of the distortionary taxation of company cars are estimated to be at least €2,000 per company car. For the whole of Europe, these welfare costs are estimated to be at least €40 billion per year.This discussion has resulted in a publication in 'International Economic Review'.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-060/3.

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Date of creation: 03 Aug 2007
Date of revision: 20 Mar 2009
Handle: RePEc:dgr:uvatin:20070060

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Web page: http://www.tinbergen.nl

Related research

Keywords: Company car; car ownership; car value; welfare costs;

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Cited by:
  1. De Borger, Bruno & Wuyts, Bart, 2011. "The tax treatment of company cars, commuting and optimal congestion taxes," Transportation Research Part B: Methodological, Elsevier, vol. 45(10), pages 1527-1544.
  2. De Borger B. & Glazer A., 2010. "Subsidizing Consumption to Signal Quality of Workers," Working Papers 2010016, University of Antwerp, Faculty of Applied Economics.
  3. Copenhagen Economics, 2010. "Company Car Taxation," Taxation Papers 22, Directorate General Taxation and Customs Union, European Commission.

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