Tax competition, tax coordination, and e‐commerce

Maya Bacache Beauvallet

Journal of Public Economic Theory, 2018, vol. 20, issue 1, 100-117

Abstract: This paper contributes to the political debate on commodity tax coordination in Europe. It examines, within Nielsen's setting, the impact of online shopping on taxes and tax competition and contrasts destination‐based taxation with origin‐based taxation. Heterogeneous consumers surf the Internet at a cost. It is assumed that fiscal leakage occurs during transactions on the Internet either because of tax evasion or of the existence of a tax liability threshold. Whereas cross‐border shopping effectively results in taxes being levied at origin, this model by adding e‐commerce shows that taxing online trade based on the origin principle softens tax competition and allows sustaining the destination principle on brick‐and‐mortar shops. Tax competition is reduced if tax is origin‐based, because the Internet helps the small country expand its tax base, which induces tax convergence.

Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/jpet.12254

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:bla:jpbect:v:20:y:2018:i:1:p:100-117

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1097-3923

Access Statistics for this article

Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

More articles in Journal of Public Economic Theory from Association for Public Economic Theory Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().