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Tax Compliance in the Rental Housing Market: Evidence from a Field Experiment

Author

Listed:
  • Essi Eerola

    (Bank of Finland)

  • Tuomas Kosonen

    (Finnish Centre of Excellence in Tax Systems Research, VATT Institute for Economic Research)

  • Kaisa Kotakorpi

    (Finnish Centre of Excellence in Tax Systems Research, Tampere University, VATT Institute for Economic Research)

  • Teemu Lyytikäinen

    (Finnish Centre of Excellence in Tax Systems ResearchVATT Institute for Economic Research)

Abstract

We study rental income tax compliance using novel third-party information and a large-scale randomized field experiment. The third-party information combines register data on the ownership and occupancy of apartments. The RCT sent information letters about the usage of third-party information in tax enforcement. This increased the propensity to report rental income and the amount of reported rental income net of expenses. Our research design also allows us to identify members of ownership networks and analyze spillover effects in tax enforcement between them. We find positive reporting spillovers. We do not find evidence of real effects on asset market transactions.

Suggested Citation

  • Essi Eerola & Tuomas Kosonen & Kaisa Kotakorpi & Teemu Lyytikäinen, 2023. "Tax Compliance in the Rental Housing Market: Evidence from a Field Experiment," Working Papers 14, Finnish Centre of Excellence in Tax Systems Research.
    • Handle: RePEc:fit:wpaper:14
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Antinyan, Armenak & Asatryan, Zareh, 2019. "Nudging for tax compliance: A meta-analysis," ZEW Discussion Papers 19-055, ZEW - Leibniz Centre for European Economic Research.
    2. Kotakorpi, Kaisa & Nurminen, Tuomas & Miettinen, Topi & Metsälampi, Satu, 2024. "Bearing the burden — Implications of tax reporting institutions on evasion and incidence," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 81-134.
    3. Jana Cahlikova & Lubomir Cingl & Katerina Chadimova & Miroslav Zajicek, 2021. "Carrots, Sticks, or Simplicity? Field Evidence on What Makes People Pay TV Fees," Working Papers tax-mpg-rps-2021-12, Max Planck Institute for Tax Law and Public Finance.
    4. Kaisa Kotakorpiⓡ & Tuomas Nurminenⓡ & Topi Miettinen ⓡ & Satu Metsälampiⓡ & Kaisa Kotakorpi, 2022. "Bearing the Burden - Implications of Tax Reporting Institutions and Image Concerns on Evasion and Incidence," CESifo Working Paper Series 9791, CESifo.
    5. Blesse, Sebastian, 2021. "Are your tax problems an opportunity not to pay taxes? Evidence from a randomized survey experiment," ZEW Discussion Papers 21-040, ZEW - Leibniz Centre for European Economic Research.
    6. Kaisa Kotakorpi & Tuomas Nurminen & Topi Miettinen & Satu Metsälampi, 2022. "Bearing the burden – Implications of tax reporting institutions and image concerns on evasion and incidence," Working Papers 3, Finnish Centre of Excellence in Tax Systems Research.

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    More about this item

    Keywords

    Tax compliance; field experiment; rental market; spillovers; real effects of tax enforcement;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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