The Taxation of Interest in Europe: A Minimum Withholding Tax?

31 Pages Posted: 8 Sep 1997

See all articles by Harry Huizinga

Harry Huizinga

Tilburg University - Center for Economic Research (CentER); Centre for Economic Policy Research (CEPR)

Soren Bo Nielsen

Copenhagen Business School - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 1997

Abstract

This paper provides an analysis of the proposal for introducing a minimum withholding tax on interest in the EU. We present a model with three countries: a typical EU country, an "inside" tax haven, and an "outside" tax haven. In the initial non-cooperative solution, the former two countries impose withholding taxes on interest. We investigate what happens to welfare in these countries if the "inside" tax haven is forced to raise its withholding tax. From the model we proceed to a broader evaluation of the minimum withholding tax proposal.

JEL Classification: H21

Suggested Citation

Huizinga, Harry and Nielsen, Soren Bo, The Taxation of Interest in Europe: A Minimum Withholding Tax? (April 1997). Available at SSRN: https://ssrn.com/abstract=25502 or http://dx.doi.org/10.2139/ssrn.25502

Harry Huizinga (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2623 (Phone)
+31 13 466 3042 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Soren Bo Nielsen

Copenhagen Business School - Department of Economics ( email )

Porcelænshaven 16 A, 1
Frederiksberg C, DK-2000
Denmark

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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