Tax us, if you can : a game theoretic approach to profit shifting within the European Union

Detalhes bibliográficos
Autor(a) principal: Vicente, Joana Andrade
Data de Publicação: 2021
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.5/22569
Resumo: In this paper we theoretically analyse the European Union’s ongoing political impasse regarding the choice of a single method to allocate multinational enterprises’ profits across countries and we find that this strategic situation resembles a coordination game with distributional consequences. The two Nash equilibria involve no efficiency trade-off (only a movement along the Pareto frontier), but the conflictual distribution of welfare gains and the presence of heterogeneous preferences have been preventing the implementation of a new long-term comprehensive tax policy reform. A unitary taxation approach with formulary apportionment in the European Union is better suited to tackle artificial profit shifting via transfer pricing and would mean an evolutionary change without disrupting the current international tax policy environment. It would restore faith in fairness in the European tax system and allow for further coordination of the transfer pricing policies of the two main international political forces – the United States and the European Union.
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spelling Tax us, if you can : a game theoretic approach to profit shifting within the European Unionbase erosion and profit shiftingCommon Consolidated Corporate Tax Basecoordination gamesEuropean Uniontransfer pricingIn this paper we theoretically analyse the European Union’s ongoing political impasse regarding the choice of a single method to allocate multinational enterprises’ profits across countries and we find that this strategic situation resembles a coordination game with distributional consequences. The two Nash equilibria involve no efficiency trade-off (only a movement along the Pareto frontier), but the conflictual distribution of welfare gains and the presence of heterogeneous preferences have been preventing the implementation of a new long-term comprehensive tax policy reform. A unitary taxation approach with formulary apportionment in the European Union is better suited to tackle artificial profit shifting via transfer pricing and would mean an evolutionary change without disrupting the current international tax policy environment. It would restore faith in fairness in the European tax system and allow for further coordination of the transfer pricing policies of the two main international political forces – the United States and the European Union.ISEG - REM – Research in Economics and MathematicsRepositório da Universidade de LisboaVicente, Joana Andrade2021-11-25T19:00:40Z2021-112021-11-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/22569engVicente, Joana Andrade (2021). "Tax us, if you can : a game theoretic approach to profit shifting within the European Union". Instituto Superior de Economia e Gestão – REM Working paper series nº 0206/20212184-108Xinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:52:06Zoai:www.repository.utl.pt:10400.5/22569Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:06:58.036189Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Tax us, if you can : a game theoretic approach to profit shifting within the European Union
title Tax us, if you can : a game theoretic approach to profit shifting within the European Union
spellingShingle Tax us, if you can : a game theoretic approach to profit shifting within the European Union
Vicente, Joana Andrade
base erosion and profit shifting
Common Consolidated Corporate Tax Base
coordination games
European Union
transfer pricing
title_short Tax us, if you can : a game theoretic approach to profit shifting within the European Union
title_full Tax us, if you can : a game theoretic approach to profit shifting within the European Union
title_fullStr Tax us, if you can : a game theoretic approach to profit shifting within the European Union
title_full_unstemmed Tax us, if you can : a game theoretic approach to profit shifting within the European Union
title_sort Tax us, if you can : a game theoretic approach to profit shifting within the European Union
author Vicente, Joana Andrade
author_facet Vicente, Joana Andrade
author_role author
dc.contributor.none.fl_str_mv Repositório da Universidade de Lisboa
dc.contributor.author.fl_str_mv Vicente, Joana Andrade
dc.subject.por.fl_str_mv base erosion and profit shifting
Common Consolidated Corporate Tax Base
coordination games
European Union
transfer pricing
topic base erosion and profit shifting
Common Consolidated Corporate Tax Base
coordination games
European Union
transfer pricing
description In this paper we theoretically analyse the European Union’s ongoing political impasse regarding the choice of a single method to allocate multinational enterprises’ profits across countries and we find that this strategic situation resembles a coordination game with distributional consequences. The two Nash equilibria involve no efficiency trade-off (only a movement along the Pareto frontier), but the conflictual distribution of welfare gains and the presence of heterogeneous preferences have been preventing the implementation of a new long-term comprehensive tax policy reform. A unitary taxation approach with formulary apportionment in the European Union is better suited to tackle artificial profit shifting via transfer pricing and would mean an evolutionary change without disrupting the current international tax policy environment. It would restore faith in fairness in the European tax system and allow for further coordination of the transfer pricing policies of the two main international political forces – the United States and the European Union.
publishDate 2021
dc.date.none.fl_str_mv 2021-11-25T19:00:40Z
2021-11
2021-11-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.5/22569
url http://hdl.handle.net/10400.5/22569
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Vicente, Joana Andrade (2021). "Tax us, if you can : a game theoretic approach to profit shifting within the European Union". Instituto Superior de Economia e Gestão – REM Working paper series nº 0206/2021
2184-108X
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
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dc.publisher.none.fl_str_mv ISEG - REM – Research in Economics and Mathematics
publisher.none.fl_str_mv ISEG - REM – Research in Economics and Mathematics
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
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instacron_str RCAAP
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