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Company Tax Reform in Europe and its Effect on Collusive Behavior

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  • Dirk Schindler
  • Guttorm Schjelderup

Abstract

We study how harmonization of corporate tax systems affects the stability of international cartels. We show that tax base harmonization reinforces collusive agreements, while harmonization of corporate tax rates may destabilize or stabilize cartels. We also find that bilateral and full harmonization to a common standard is worse from society’s point of view than unilateral harmonization to a minimum tax standard.

Suggested Citation

  • Dirk Schindler & Guttorm Schjelderup, 2006. "Company Tax Reform in Europe and its Effect on Collusive Behavior," CESifo Working Paper Series 1702, CESifo.
    • Handle: RePEc:ces:ceswps:_1702
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    More about this item

    Keywords

    corporate tax systems; tacit collusion;

    JEL classification:

    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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