Negotiated Tax Havens

42 Pages Posted: 30 Nov 2018

See all articles by Kevin Markle

Kevin Markle

University of Iowa - Henry B. Tippie College of Business

Leslie A. Robinson

Dartmouth College - Accounting; Dartmouth College - Tuck School of Business

Date Written: November 8, 2018


Recently, the intersection of state aid and international tax has acquired a high profile in the European Union. In response, important tax and accounting policy changes are being proposed or implemented. However, these changes are predicated on rhetoric that unfair tax ruling practices by host country governments are pervasive, and significantly benefit foreign-owned companies. Yet, there is no empirical evidence as to whether this is the case. Using several novel data sources on tax concessions granted in the EU, we find that both domestic- and foreign-owned companies receive economically significant tax benefits from state aid. Our finding that tax concessions create significant disparities across firms’ profitability and effective tax rates suggest that any country can operate as a tax haven for any company, without greater supervision and transparency.

Keywords: tax policy, FDI, state aid, competition, foreign-owned

JEL Classification: H25, F23

Suggested Citation

Markle, Kevin and Robinson, Leslie, Negotiated Tax Havens (November 8, 2018). Tuck School of Business Working Paper No. 3280683. Available at SSRN: or

Kevin Markle (Contact Author)

University of Iowa - Henry B. Tippie College of Business ( email )

5020 Main Library
Iowa City, IA 52242-1000
United States
319-335-1903 (Phone)
319-335-1956 (Fax)


Leslie Robinson

Dartmouth College - Accounting ( email )

100 Tuck Hall
Hanover, NH 03755
United States
603-646-4018 (Phone)

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

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