Economics at your fingertips  

Incentives and Information Exchange in International Taxation

Michael Keen () and Jenny Ligthart

International Tax and Public Finance, 2006, vol. 13, issue 2, 163-180

Abstract: The exchange of taxpayer-specific information between national tax authorities has recently emerged as a key and controversial topic in international tax policy discussions, most notably with the OECD's harmful tax practices project and the EU's savings tax initiative. This paper analyzes the effects of information exchange and withholding taxes, recognizing that countries which agree to exchange information do not forfeit the ability to levy withholding taxes, and also focusing in particular on the effects of innovative revenue-sharing arrangements. Amongst the findings are that: (i) the transfer of withholding tax receipts to the residence country, as planned in the European Union, has no effect on equilibrium tax rates, but acts purely as a lump-sum transfer; (ii) in contrast, allocating some of the revenue from information exchange to the source country—counter to usual practice (though no less so than the EU agreement)—would have adverse strategic effects on total revenue; (iii) nevertheless, any withholding tax regime is Pareto dominated by information exchange combined with appropriate revenue sharing; and, in particular, (iv) sharing of the additional revenues raised from information provided, while efficiency-reducing, could be in the interests of large countries as a means of persuading small countries to provide that information voluntarily. Copyright Springer Science + Business Media, Inc. 2006

Keywords: international tax competition; international tax evasion; information exchange; withholding taxes (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Incentives and Information Exchange in International Taxation (2004) Downloads
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:

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2020-01-17
Handle: RePEc:kap:itaxpf:v:13:y:2006:i:2:p:163-180