Revenue Sharing and Information Exchange under Non-Discriminatory Taxation

M. Keen, J.E. Ligthart

Research output: Working paperDiscussion paperOther research output

233 Downloads (Pure)

Abstract

The international exchange of tax information, and its merits compared to withholding taxes, is the central topic in current debates in international tax policy.The purpose of this paper is to characterize and compare the tax regimes that emerge with and without information exchange, under the assumption that countries are unable to differentiate between the taxes they apply to residents and non-residents.It focuses in particular on the role of asymmetries in country size (capturing a key feature of tax havens) and on the impact and potential desirability of schemes to share the revenue raised by withholding (as under the new EU savings tax arrangements) or (more innovatively) as a consequence of information exchange.It is shown that (irrespective of country size difference) Pareto efficiency requires that all revenue collected from nonresidents be transferred to the residence country which would require taking the EU practice even further from the norm, but is currently the norm in relation to information exchange.A withholding scheme with revenue fully reallocated in this way Pareto dominates information sharing, whatever the allocation under the latter. Comparing schemes in which there is no revenue sharing, however, shows that information exchange Pareto dominates simple withholding.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages18
Volume2005-69
Publication statusPublished - 2005

Publication series

NameCentER Discussion Paper
Volume2005-69

Fingerprint

Revenue sharing
Tax
Taxation
Information exchange
Revenue
Country size
Pareto
Tax policy
Pareto efficiency
Information sharing
Asymmetry
Residents
Tax havens
Withholding tax
Savings

Keywords

  • revenue sharing
  • tax information exchange
  • tax competition
  • international tax evasion
  • withholding taxes

Cite this

Keen, M., & Ligthart, J. E. (2005). Revenue Sharing and Information Exchange under Non-Discriminatory Taxation. (CentER Discussion Paper; Vol. 2005-69). Tilburg: Macroeconomics.
Keen, M. ; Ligthart, J.E. / Revenue Sharing and Information Exchange under Non-Discriminatory Taxation. Tilburg : Macroeconomics, 2005. (CentER Discussion Paper).
@techreport{057ade7ac8c64a5885e5b064e8193f5f,
title = "Revenue Sharing and Information Exchange under Non-Discriminatory Taxation",
abstract = "The international exchange of tax information, and its merits compared to withholding taxes, is the central topic in current debates in international tax policy.The purpose of this paper is to characterize and compare the tax regimes that emerge with and without information exchange, under the assumption that countries are unable to differentiate between the taxes they apply to residents and non-residents.It focuses in particular on the role of asymmetries in country size (capturing a key feature of tax havens) and on the impact and potential desirability of schemes to share the revenue raised by withholding (as under the new EU savings tax arrangements) or (more innovatively) as a consequence of information exchange.It is shown that (irrespective of country size difference) Pareto efficiency requires that all revenue collected from nonresidents be transferred to the residence country which would require taking the EU practice even further from the norm, but is currently the norm in relation to information exchange.A withholding scheme with revenue fully reallocated in this way Pareto dominates information sharing, whatever the allocation under the latter. Comparing schemes in which there is no revenue sharing, however, shows that information exchange Pareto dominates simple withholding.",
keywords = "revenue sharing, tax information exchange, tax competition, international tax evasion, withholding taxes",
author = "M. Keen and J.E. Ligthart",
note = "Pagination: 18",
year = "2005",
language = "English",
volume = "2005-69",
series = "CentER Discussion Paper",
publisher = "Macroeconomics",
type = "WorkingPaper",
institution = "Macroeconomics",

}

Keen, M & Ligthart, JE 2005 'Revenue Sharing and Information Exchange under Non-Discriminatory Taxation' CentER Discussion Paper, vol. 2005-69, Macroeconomics, Tilburg.

Revenue Sharing and Information Exchange under Non-Discriminatory Taxation. / Keen, M.; Ligthart, J.E.

Tilburg : Macroeconomics, 2005. (CentER Discussion Paper; Vol. 2005-69).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Revenue Sharing and Information Exchange under Non-Discriminatory Taxation

AU - Keen, M.

AU - Ligthart, J.E.

N1 - Pagination: 18

PY - 2005

Y1 - 2005

N2 - The international exchange of tax information, and its merits compared to withholding taxes, is the central topic in current debates in international tax policy.The purpose of this paper is to characterize and compare the tax regimes that emerge with and without information exchange, under the assumption that countries are unable to differentiate between the taxes they apply to residents and non-residents.It focuses in particular on the role of asymmetries in country size (capturing a key feature of tax havens) and on the impact and potential desirability of schemes to share the revenue raised by withholding (as under the new EU savings tax arrangements) or (more innovatively) as a consequence of information exchange.It is shown that (irrespective of country size difference) Pareto efficiency requires that all revenue collected from nonresidents be transferred to the residence country which would require taking the EU practice even further from the norm, but is currently the norm in relation to information exchange.A withholding scheme with revenue fully reallocated in this way Pareto dominates information sharing, whatever the allocation under the latter. Comparing schemes in which there is no revenue sharing, however, shows that information exchange Pareto dominates simple withholding.

AB - The international exchange of tax information, and its merits compared to withholding taxes, is the central topic in current debates in international tax policy.The purpose of this paper is to characterize and compare the tax regimes that emerge with and without information exchange, under the assumption that countries are unable to differentiate between the taxes they apply to residents and non-residents.It focuses in particular on the role of asymmetries in country size (capturing a key feature of tax havens) and on the impact and potential desirability of schemes to share the revenue raised by withholding (as under the new EU savings tax arrangements) or (more innovatively) as a consequence of information exchange.It is shown that (irrespective of country size difference) Pareto efficiency requires that all revenue collected from nonresidents be transferred to the residence country which would require taking the EU practice even further from the norm, but is currently the norm in relation to information exchange.A withholding scheme with revenue fully reallocated in this way Pareto dominates information sharing, whatever the allocation under the latter. Comparing schemes in which there is no revenue sharing, however, shows that information exchange Pareto dominates simple withholding.

KW - revenue sharing

KW - tax information exchange

KW - tax competition

KW - international tax evasion

KW - withholding taxes

M3 - Discussion paper

VL - 2005-69

T3 - CentER Discussion Paper

BT - Revenue Sharing and Information Exchange under Non-Discriminatory Taxation

PB - Macroeconomics

CY - Tilburg

ER -

Keen M, Ligthart JE. Revenue Sharing and Information Exchange under Non-Discriminatory Taxation. Tilburg: Macroeconomics. 2005. (CentER Discussion Paper).