Residence-Based Capital Taxation in a Small Open Economy: Why Information is Voluntarily Exchanged and Why it is Not
Journal
International Tax and Public Finance
ISSN
0927-5940
Type
journal article
Date Issued
2002-08-01
Author(s)
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.
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.
Language
English
Keywords
tax competition
information exchange
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Springer
Publisher place
New York
Volume
9
Number
4
Start page
465
End page
482
Pages
18
Subject(s)
Division(s)
Eprints ID
223632