Negotiated Tax Havens
60 Pages Posted: 30 Nov 2018 Last revised: 2 Oct 2019
Date Written: September 30, 2019
The intersection of state aid and international tax has acquired a high profile in Europe. In response, disclosure policies are being proposed. With no empirical evidence, these policies are predicated on rhetoric that pervasive practices by host country governments unfairly benefit foreign-owned companies. Using several novel data sources on tax relief granted in the EU, we find that both domestic- and foreign-owned companies benefit from tax concessions. Our evidence that tax avoidance is a joint production function of business and government suggests that any jurisdiction can operate as a tax haven for a company willing to negotiate.
Keywords: tax policy, FDI, state aid, competition, foreign-owned
JEL Classification: H25, F23
Suggested Citation: Suggested Citation