Is There Regional Tax Competition? Firm Level Evidence for Belgium

Karen Crabbé (), Boudewijn Janssen and Hylke Vandenbussche ()

No 4721, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This is the first Paper that looks at regional tax competition within one single country. In many countries in Europe, regions within a country differ substantially in their economic development and attractiveness to firms. Belgium is a typical example of a country where the economic situation of its three regions is very different. Our findings are indicative of regional tax competition, with a lower Effective Tax Rate (ETR) in the peripheral region of Wallonia than in Flanders. In addition to location variables, our empirical model explaining firm level heterogeneity in ETRs includes firm characteristics, sector membership and variables capturing statutory tax breaks.

Keywords: Belgian firms; company accounts; effective tax rates (search for similar items in EconPapers)
JEL-codes: C50 F36 H25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-geo, nep-pbe and nep-ure
Date: 2004-10
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Journal Article: Is there Regional Tax Competition? Firm Level Evidence for Belgium (2005)
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