IDEAS home Printed from https://ideas.repec.org/a/kap/itaxpf/v9y2002i4p465-482.html

Residence-Based Capital Taxation in a Small Open Economy: Why Information is Voluntarily Exchanged and Why it is Not

Author

Listed:
  • Wolfgang Eggert
  • Martin Kolmar

Abstract

The issue of capital tax competition is viewed to be unproblematic if residence-based capital-taxation exists. However, the sustainability of residence-based capital taxation depends on the exchange of information about foreign financial investments between tax authorities. This paper analyzes the incentives of tax authorities to voluntarily provide information. We show that voluntary information exchange is an equilibrium in a standard small-country model of tax competition, whereas it may not be an equilibrium when the size of the financial sector has a positive impact on the wage structure of an economy. Copyright Kluwer Academic Publishers 2002

Suggested Citation

  • Wolfgang Eggert & Martin Kolmar, 2002. "Residence-Based Capital Taxation in a Small Open Economy: Why Information is Voluntarily Exchanged and Why it is Not," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(4), pages 465-482, August.
    • Handle: RePEc:kap:itaxpf:v:9:y:2002:i:4:p:465-482
    DOI: 10.1023/A:1016524221236
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1023/A:1016524221236
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1023/A:1016524221236?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Douglas W. Diamond & Philip H. Dybvig, 2000. "Bank runs, deposit insurance, and liquidity," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 24(Win), pages 14-23.
    2. Michael Keen & David E. Wildasin, 2000. "Pareto Efficiency in International Taxation," CESifo Working Paper Series 371, CESifo.
    3. Razin, Assaf & Sadka, Efraim, 1991. "International tax competition and gains from tax harmonization," Economics Letters, Elsevier, vol. 37(1), pages 69-76, September.
    4. Bacchetta, Philippe & Espinosa, Maria Paz, 1995. "Information sharing and tax competition among governments," Journal of International Economics, Elsevier, vol. 39(1-2), pages 103-121, August.
    5. Gordon, Roger H, 1986. "Taxation of Investment and Savings in a World Economy," American Economic Review, American Economic Association, vol. 76(5), pages 1086-1102, December.
    6. Huizinga, Harry & Nielsen, Soren Bo, 2003. "Withholding taxes or information exchange: the taxation of international interest flows," Journal of Public Economics, Elsevier, vol. 87(1), pages 39-72, January.
    7. Bucovetsky, Sam & Wilson, John Douglas, 1991. "Tax competition with two tax instruments," Regional Science and Urban Economics, Elsevier, vol. 21(3), pages 333-350, November.
    8. Julian Alworth, 1998. "Taxation and Integrated Financial Markets: The Challenges of Derivatives and Other Financial Innovations," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(4), pages 507-534, October.
    9. Philippe Bacchetta & María Espinosa, 2000. "Exchange-of-Information Clauses in International Tax Treaties," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(3), pages 275-293, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wolfgang Eggert & Martin Kolmar, 2004. "The Taxation of Financial Capital under Asymmetric Information and the Tax‐competition Paradox," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(1), pages 83-106, March.
    2. Schwarz, Peter, 2009. "Why are countries reluctant to exchange information on interest income? Participation in and effectiveness of the EU Savings Tax Directive," International Review of Law and Economics, Elsevier, vol. 29(2), pages 97-105, June.
    3. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," EPRU Working Paper Series 06-06, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    4. Fuest, Clemens & Huber, Bernd, 2001. "Why is there so little tax coordination? The role of majority voting and international tax evasion," Regional Science and Urban Economics, Elsevier, vol. 31(2-3), pages 299-317, April.
    5. Huizinga, Harry & Nielsen, Søren Bo, 2008. "Must losing taxes on saving be harmful?," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1183-1192, June.
    6. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," CESifo Working Paper Series 1793, CESifo.
    7. Dickescheid, Thomas, 2002. "Steuerwettbewerb und Direktinvestitionen," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 16, number urn:isbn:9783161477348, December.
    8. Zodrow, George R, 2003. "Tax Competition and Tax Coordination in the European Union," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(6), pages 651-671, November.
    9. Eggert, Wolfgang & Haufler, Andreas, 1999. "Capital taxation and production efficiency in an open economy," Economics Letters, Elsevier, vol. 62(1), pages 85-90, January.
    10. Thomas Hemmelgarn & Gaëtan Nicodème, 2009. "Tax Co-ordination in Europe: Assessing the First Years of the EU-Savings Taxation Directive," Working Papers CEB 09-023.RS, ULB -- Universite Libre de Bruxelles.
    11. Huizinga, Harry & Nielsen, Soren Bo, 2002. "The coordination of capital income and profit taxation with cross-ownership of firms," Regional Science and Urban Economics, Elsevier, vol. 32(1), pages 1-26, January.
    12. 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.
    13. Braid, Ralph M., 2005. "Tax competition, tax exporting and higher-government choice of tax instruments for local governments," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1789-1821, September.
    14. Lars Gläser & Martin Halla, 2008. "Die EU‐Zinsenrichtlinie: Ein Schuss in den Ofen?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(1), pages 83-101, February.
    15. Wolfgang Eggert & Laszlo Goerke, "undated". "Fiscal Policy, Economic Integration and Unemployment," EPRU Working Paper Series 02-05, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    16. Homburg, Stefan, 2010. "Allgemeine Steuerlehre: Kapitel 1. Grundbegriffe der Steuerlehre," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 92547, August.
    17. Koskela Erkki & Schöb Ronnie, 2002. "Why Governments Should Tax Mobile Capital in the Presence of Unemployment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-22, January.
    18. Nourat Al Hayat Guigma, 2025. "Tackling tax base erosion in developing countries: Does information exchange initiative make a difference?," Economics of Governance, Springer, vol. 26(3), pages 401-437, September.
    19. Braid, Ralph M., 2000. "A Spatial Model of Tax Competition with Multiple Tax Instruments," Journal of Urban Economics, Elsevier, vol. 47(1), pages 88-114, January.
    20. Werner Roeger & Jan Veld & Don Woehrmann, 2002. "Some Equity and Efficiency Considerations of International Tax Competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(1), pages 7-31, January.

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:itaxpf:v:9:y:2002:i:4:p:465-482. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.