How Will Brexit Affect Tax Competition and Tax Harmonization? The Role of Discriminatory Taxation
Clemens Fuest () and
No 6807, CESifo Working Paper Series from CESifo Group Munich
This paper develops a model of tax competition with three countries, which initially form a union where countries refrain from using different tax rates in different sectors of the economy. We study the impact of one country leaving the union. We show that the introduction of discriminatory taxation in one country increases tax policy heterogeneity within the remaining union. Moreover, the incentives for the two remaining countries to harmonize their tax rates decline. We discuss these results in the context of the debate about the tax policy implications of Brexit.
Keywords: international taxation; tax competition; preferential tax regimes (search for similar items in EconPapers)
JEL-codes: H20 H73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-int and nep-pbe
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Journal Article: How Will Brexit Affect Tax Competition and Tax Harmonization? The Role of Discriminatory Taxation (2019)
Working Paper: How will Brexit Affect Tax Competition and Tax Harmonization? The Role of Discriminatory Taxation (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6807
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