Lobbying and the international fight against tax havens

Arbeitspapier

Despite a variety of measures taken by high tax countries, the international fight against tax havens so far remained rather ineffective. This paper introduces lobbying as a possible explanation for this observation. I analyze the international fight against tax havens in a two country model in which the onshore country exerts pressure on domestic profit shifting firms and the low tax country lobbies against this measure. In this framework, I find that pressure and lobbying are strategic substitutes and that there is an extensive margin incentive for offshore lobbying. I also show that an increase in international integration leads to a decrease in the level of profit shifting, when starting out at high levels of international frictions. Finally, when allowing for a second low tax jurisdiction, the overall level of lobbying increases, but less than proportionally, as free-riding occurs.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Munich Discussion Paper ; No. 2018-4

Classification and Topics

• Classification: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT) ; Tax Evasion and Avoidance ; Multinational Firms; International Business
• Subject: International Taxation ; Tax Avoidance ; Pressure Policies ; Tax Havens ; International Lobbying

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hauck, Tobias
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (where): München
• (when): 2018

Further information

• DOI: doi:10.5282/ubm/epub.43213
• Handle: http://hdl.handle.net/10419/191670
• URN: urn:nbn:de:bvb:19-epub-43213-8
• Last update: 10.03.2025, 11:42 AM CET