Coordinating VATs Between EU Member States

The paper surveys the characteristics of the common European VAT system, proposed by the EU-Commission to overcome the weaknesses of the transitional European VAT system, which was enacted in 1993 and is still in force. We argue that a harmonized VAT rate will generate substantial costs for EU member states to meet national budget requirements and that the revenue sharing mechanisms will generate adverse incentives to national efforts in VAT collection and control. A comparison of the Commission proposal with four alternative VAT regimes favours a modified VIVAT system as an attractive compromise.value-added taxation, tax coordination.

Is tax harmonization useful?

It is a widely acknowledged result of the literature on capital tax competition that underprovision of public goods can only be avoided if tax coordination between governments is intensive and residence-based capital taxation can be enforced. In this paper we use a model where commodity and factor taxes are available and we show that governments competing for tax bases will choose a globally efficient tax structure. In contrast to previous conclusions, we also show that the availability of a destination-based commodity tax or a labor tax is necessary to mitigate the problem of inefficient Nash equilibria and thus reduces the necessity of supranational tax harmonization or coordination.

Coordinating VATs Between EU Member States

The paper surveys the characteristics of the common European VAT system, proposed by the EU-Commission to overcome the weaknesses of the transitional European VAT system, which was enacted in 1993 and is still in force. We argue that a harmonized VAT rate will generate substantial costs for EU member states to meet national budget requirements and that the revenue sharing mechanisms will generate adverse incentives to national efforts in VAT collection and control. A comparison of the Commission proposal with four alternative VAT regimes favours a modified VIVAT system as an attractive compromise

Corporate income taxation in the European Union: current state perspectives

The paper reviews the state and recent changes in corporate income taxation in the European Union (EU) and major Organisation for Economic Cooperation and Development (OECD) countries. It also reviews coordination measures proposed and adopted in the EU so far. This empirical evidence is related to theoretical results on international tax competition. On this basis I conclude that tax competition has contributed to move the system of international capital taxation in an economically desirable direction. Although EU and OECD efforts to promote non-discrimination (‘Code of Conduct’) and curb international tax engineering strategies in multinational enterprises are desirable, a further harmonisation of corporate tax systems does not seem to be warranted

Austria's steps towards a dual income tax

The paper comments on the introduction of a final withholding tax on certain forms of capital income in Austria in the early nineties. Economic and legal problems of the reform measures are discussed and they* are appraised as policy responses to weak points of the traditional comprehensive income tax system rather than reform steps towards a new system of dual income taxation

Zur tariflichen Umsetzung des steuerlichen Existenzminimums

Das Bundesverfassungsgericht erklärte in zwei Entscheidungen, 1990 den Kinderfreibetrag und 1992 den Grundfreibetrag des deutschen Einkommensteuergesetzes für zu niedrig und damit im Widerspruch zum Grundgesetz. In der vorliegenden Arbeit werden die international üblichen tarifpolitischen Instrumente zur Steuerfreistellung eines haushaltsbezogenen Existenzminimums hinsichtlich ihrer Verfassungskonformität sowie ihrer distributiven und fiskalischen Konsequenzen untersucht. Neben der reinen Tarifanalyse werden auch die quantitativen Wirkungen spezieller Tarifalternativen auf Durchschnittshaushalte sowie auf eine prognostizierte Verteilung von Lohnsteuerpflichtigen für das Jahr 1990 studiert, wobei jeweils ein Existenzminimum im Ausmaß des Sozialhilfeniveaus steuerfrei belassen wird.The child tax allowance and the basic tax allowance of the German income tax system have been declared by the Federal Constitutional Court as too low and thus unconstitutional. Against this background this paper provides a survey of tax instruments in OECD countries which secure tax-exemption for low-income earners. These instruments are analysed with respect to their constitutional feasability as well as their distributional and fiscal effects. Three alternative income tax schedules are compared. These use a basic allowance, a basic credit and a minimum threshold which leave the subsistence level tax free but retain the marginal tax rate pattern of the 1986/88/90 income tax reform. The quantative implications of these tax policy alternatives are examined for average employee households and for an estimated distribution of wage income in 1990

The Taxation of Internationally Portable Pensions: Fiscal Issues and Policy Options

Pension policy reforms across the world in recent decades are a reaction to the changing demographic and socioeconomic environment. While pension scheme redesign has received much attention, the tax treatment of contributions, returns, and benefits of retirement savings remains mostly unattended and the taxation of internationally portable pensions is terra incognita for economists. This paper focuses on the huge differences in old-age pension taxation within and across OECD countries and highlights fiscal equity and efficiency issues that emerge in a world of internationally mobile workers and pensioners. It highlights that pension taxation differs widely not only across countries but also across pension pillars within a country, creating savings and mobility distortions and fiscal equity problems at individual and country level. The paper offers explanations for this heterogeneity and proposes a switch from deferred taxation towards front-loaded taxation of retirement savings to meet the demographic challenges of a globalized world. Three policy options presented differ in the way taxes are paid, but all of them are claimed superior to single-country measures taken to uphold deferred pension taxation or to rely on renegotiations of bilateral double taxation treaties