The Norwegian Shareholder Tax Reconsidered

Jan Södersten () and Tobias Lindhe ()
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Tobias Lindhe: Uppsala Center for Fiscal Studies, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

No 2011:6, Working Paper Series from Uppsala University, Department of Economics

Abstract: In an article in International Tax and Public Finance, Peter Birch Sørensen (2005) gives an in-depth account of the new Norwegian Shareholder Tax, which allows the shareholders a deduction for an imputed risk-free rate of return. Sørensen’s positive evaluation appears as reasonable for a closed economy where the deduction for the imputed return is capitalized into the market prices of corporate shares. We show that in a small open economy where no capitalization occurs, the Norwegian shareholder tax is likely to leave the distortions caused by the corporate income tax unaffected, and to add new distortions to shareholders’ portfolio decisions.

Keywords: Tax neutrality; open economy; shareholder taxation; corporate-personal tax integration; small firms (search for similar items in EconPapers)
JEL-codes: H24 H25 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2011-04-28
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Related works:
Journal Article: The Norwegian shareholder tax reconsidered (2012)
Working Paper: The Norwegian Shareholder Tax Reconsidered (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:uunewp:2011_006

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