Assessing the credibility and fairness of international corporate tax rate harmonization via cooperative game theory

Alexandre Chirat () and Guillaume Sekli ()
Additional contact information
Alexandre Chirat: Université Paris Ouest Nanterre - EconomiX
Guillaume Sekli: CRESE EA3190, Univ. Bourgogne Franche-Comté, F-25000 Besançon, France

No 2022-08, Working Papers from CRESE

Abstract: This article uses the main tools of cooperative game theory, the core of a game and the Shapley value, to tackle the challenge posed by corporate tax harmonization in order to fight tax competition and profit shifting. These tools are applied to provide a counterfactual evaluation and to assess the credibility of Saez and Zucman (2019) proposal to establish a minimum rate at 25% at the G7/G20 level. Based on the empirical data of Tørsløv et al. (2020), our main results are the following. First, at the G7 level, the more countries involved in the agreement, the more efficient it would be. Second, stability of cooperation at the G7 level can be achieved without giving up fairness consideration in the distribution of the surplus. We then extend our application to the G20 and show that these results do not hold anymore. Third, from our original methodological approach, we confirm that not only the target rate matters in the perspective of international tax cooperation, but also the numbers of participants and their current effective rates.

Keywords: International taxation; Tax cooperation; Profit shifting; Tax havens; Shapley value (search for similar items in EconPapers)
JEL-codes: C71 E62 F42 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2022-08
New Economics Papers: this item is included in nep-gth and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://crese.univ-fcomte.fr/uploads/wp/WP-2022-08.pdf First version, 2022 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:crb:wpaper:2022-08

Access Statistics for this paper

More papers in Working Papers from CRESE Contact information at EDIRC.
Bibliographic data for series maintained by Laurent Kondratuk ().