Une approche novatrice pour évaluer l'efficacité des dépenses fiscales : Application aux incitations fiscales régionales en faveur de l'investissement des entreprises en Italie
Cette étude évalue les incitations fiscales régionales en faveur de l’investissement des entreprises en Italie et s’intéresse aux questions suivantes : (i) quel est le montant des investissements supplémentaires induits par l’intervention des pouvoirs publics ; (ii) les fonds publics ont ils supplanté, au moins en partie, les financements privés ; (iii) dans quelle mesure les effets sur les performances des entreprises se seraient ils concrétisés sans aide publique. La méthodologie fondée sur le rapprochement consiste à sélectionner un échantillon composé d’entreprises bénéficiaires et non bénéficiaires, en sorte qu’à chaque entreprise subventionnée corresponde une entreprise comparable non subventionnée, similaire en tous points hormis l’avantage fiscal. Un modèle empirique du comportement de l’entreprise en matière d’investissement est alors estimé afin de calculer l’élasticité de la demande par rapport aux prix et à l’impôt et de tester la sensibilité des décisions d’investissement à l’existence de fonds internes, en tenant compte de la structure dynamique qui sous-entend l’accumulation de capital. Cette nouvelle approche de l’évaluation des dépenses fiscales nous permet de traiter le problème de l’endogénéité des décisions de participation des entreprises, et de prendre en compte les différents canaux par lesquels les incitations fiscales exercent leur action. Enfin, l’impact du crédit d’impôt pour investissement sur les niveaux de la PTF est mesuré en modélisant la dynamique de la productivité au niveau de l’entreprise.
Creation-Date: 2011-11-03
Number: 5
Handle: RePEc:oec:ctpaaa:5-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Marco Manzo
Author-Workplace-Name: Ministry of Economy and Finance, Italy
Title: Corporate Taxation and SMEs: The Italian Experience: The Italian Experience
Abstract: This paper focuses on the tax impediments faced by small and medium-sized enterprises in Italy. The fact that small businesses are characterized by financing constraints and have less access to bank loans is often emphasized as an argument in favour of a special tax treatment for small enterprises. On the one hand, however, the evidence that SMEs suffer severe financing constraints is not overwhelming; on the other hand, tax relief for SMEs is not necessarily the best response to financial market imperfections.
Creation-Date: 2011-11-03
Number: 6
Handle: RePEc:oec:ctpaaa:6-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Fidel Picos-Sánchez
Author-Workplace-Name: University of Vigo
Title: Consumption Taxation as an Additional Burden on Labour Income
Abstract: The OECD’s Taxing Wages (TW) Report1 provides details of taxes paid on wages in the 34 OECD member countries. In particular, it covers the personal income tax and social security contributions paid by employees and their employers, as well as cash benefits received by families. The Report calculates the average and marginal tax burden on labour income for taxpayers at different income levels and with different family characteristics (single taxpayers and married couples with or without children). The aim of this paper is to explore the possible consequences of broadening the TW model by introducing consumption taxes, and so include the taxes that workers pay when they spend their wages in addition to the taxes that are paid when they earn them. This has been done by using micro data from Household Budget Surveys provided by several OECD countries and Eurostat, to simulate consumption taxes for families with similar characteristics to the eight types defined in Taxing Wages.
Creation-Date: 2011-11-03
Number: 7
Handle: RePEc:oec:ctpaaa:7-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Bert Brys
Author-Workplace-Name: OECD
Title: Non-Tax Compulsory Payments as an Additional Burden on Labour Income
Abstract: In 23 of the 34 OECD member countries, it is compulsory for employers and/ or employees to make additional payments, in addition to taxes and social security contributions, which increase the overall burden on labour income. These non-tax compulsory payments, which are typically paid to privatelymanaged funds, will either increase the employer’s labour costs or reduce the employee’s net take-home pay in a similar way to taxes, although they do not necessarily have the same behavioural impact. This paper discusses the different non-tax compulsory payments levied in OECD member countries and calculates “compulsory payment indicators”, which combine non-tax compulsory payments and taxes into an overall indicator of the burden of compulsory government regulation on labour income. The analysis shows that especially employers have to pay non-tax compulsory payments and that they have a considerable impact on the “tax wedge” rankings that are published in the OECD’s Taxing Wages Report.
Les prélèvements obligatoires non fiscaux comme charge additionnelle sur les revenus du travail
Dans 23 des 34 pays membres de l’OCDE, les employeurs et/ou leurs salariés sont tenus d’effectuer des paiements qui ne sont pas définis comme des impôts et cotisations de sécurité sociale et qui alourdissent la charge globale qui pèse sur les revenus du travail. Ces « prélèvements obligatoires non fiscaux », généralement effectués au profit de fonds à gestion privée, ont pour effet d’accroître les coûts de main-d’oeuvre de l’employeur ou de réduire le revenu net disponible du salarié de la même manière que des impôts, bien qu’ils n’aient pas nécessairement les mêmes effets en termes de comportement. Ce document examine les différents prélèvements obligatoires non fiscaux en vigueur dans les pays membres de l’OCDE et calcule des « indicateurs de prélèvements obligatoires », qui combinent les impôts et les prélèvements obligatoires non fiscaux dans un indicateur d’ensemble de la charge sur les revenus du travail induite par la réglementation publique. L’analyse montre que ce sont surtout les employeurs qui sont soumis à des prélèvements obligatoires non fiscaux qui ont des répercussions très sensibles sur le classement du « coin fiscal » publié dans le rapport de l’OCDE intitulé « Les impôts sur les salaires ».
Keywords: effective tax rates, impôt, labour income, non-tax compulsory payments, prélèvements obligatoires non fiscaux, revenus du travail, taux effectifs d’imposition, taxes
Creation-Date: 2011-11-03
Number: 8
Handle: RePEc:oec:ctpaaa:8-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Pamela Palazzi
Author-Workplace-Name: Agenzia delle Entrate
Title: Taxation and Innovation
Abstract: Innovation is the cornerstone of sustained economic growth and prosperity. In a globalised world, innovation is a key driver of competitiveness between businesses and it plays a critical role in the rapid growth of emerging economies. At the same time, the global financial crisis has increased the relevance of a better understanding of the role that innovation can play in restoring sustainable growth while giving focus to the issue of constrained public resources and effective public expenditure. Especially in the current context of a global financial and economic downturn, it is particularly important that tax policies continue to provide efficient incentives to fostering innovation...
Creation-Date: 2011-11-03
Number: 9
Handle: RePEc:oec:ctpaaa:9-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Bert Brys
Author-Workplace-Name: OECD
Title: Wage Income Tax Reforms and Changes in Tax Burdens: 2000-2009
Abstract: The tax burden on labour and its evolution over time are issues that feature prominently in the political debate. Averaged across the OECD, personal income taxes, social security contributions and payroll taxes together account for more than 51% of total government revenues in 2008 (OECD, 2010). With tax burdens differentiated by earnings level and family situation, they serve a central role as redistribution policies. Importantly, by shaping both work incentives and the cost of labour, the level and structure of these taxes are major influences on the functioning of labour markets...
Creation-Date: 2011-11-03
Number: 10
Handle: RePEc:oec:ctpaaa:10-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Alastair Thomas
Author-Workplace-Name: OECD
Author-Name: Fidel Picos-Sánchez
Author-Workplace-Name: University of Vigo
Title: Shifting from Social Security Contributions to Consumption Taxes: The Impact on Low-Income Earner Work Incentives
Abstract: This paper investigates the merits of increasing work incentives for low-income workers by shifting part of the tax burden from social security contributions (SSC) to consumption taxes (specifically VAT) in 13 European OECD countries. Simulation results based on household budget survey microdata show that such reforms will increase work incentives for low-income workers at both participation and hours-worked margins. However, these increases will generally be small as part of the VAT increase will still be borne by low-income workers. This, combined with difficulty targeting the reforms and potential equity concerns regarding increasing the tax burden on non-workers, suggests that alternate funding sources to a VAT increase should also be considered to fund SSC reductions.
Le remplacement des cotisations de sécurité sociale par des impôts sur la consommation : incidence sur l'incitation des salariés titulaires de faibles revenus à travailler
Ce document étudie le bien-fondé des mesures prises dans 13 pays européens de l?OCDE pour renforcer l?incitation au travail des salariés à faibles revenus par un transfert partiel de la charge fiscale des cotisations de sécurité sociale (CSS) vers les impôts sur la consommation (plus précisément la TVA). Les résultats de simulations fondées sur des données microéconomiques obtenues à la suite d?enquêtes sur les budgets des ménages montrent que ces réformes renforcent l?incitation des titulaires de faibles revenus à travailler, aussi bien pour ce qui est du choix d?accepter un emploi que du nombre d?heures ouvrées. Cependant, ce renforcement sera généralement faible, dans la mesure où une partie de l?augmentation de la TVA restera à la charge des salariés à faibles revenus. Ce fait, combiné à la difficulté de cibler les réformes et aux problèmes d?équité que risque de poser l?augmentation de la charge fiscale pesant sur des non-salariés, montre qu?il serait préférable de rechercher d?autres sources que la TVA pour financer des réductions des CSS.
Classification-JEL: H21; H23; H24; H55
Keywords: consumption tax, cotisations de sécurité sociale, impôts sur la consommation, incitation à travailler, social security contributions, TVA, VAT, work incentives
Creation-Date: 2012-07-24
Number: 11
Handle: RePEc:oec:ctpaaa:11-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Carolina Torres
Author-Workplace-Name: OECD
Author-Name: Kirsti Mellbye
Author-Workplace-Name: OECD
Author-Name: Bert Brys
Author-Workplace-Name: OECD
Title: Trends in Personal Income Tax and Employee Social Security Contribution Schedules
Abstract: Policymakers cannot directly adjust the tax burden of labour income, but they can reform the statutory elements of the tax system, which ultimately determine average and marginal tax rates. To shed light on the determinants of average and marginal personal tax rates, this paper discusses historical and cross-country trends in statutory personal income tax rates, the income thresholds where personal income tax and employee social security contribution rates apply, and other statutory provisions that shape the tax burden on labour income in OECD countries. Trends in the difference between statutory, average and marginal personal income tax rates are also analysed and graphically illustrated. The impact of employee social security contributions on top marginal personal tax rates is also discussed. The most pronounced trend that emerged from 2000 to 2010 in OECD countries is a reduction in top statutory personal income tax rates. This trend was accompanied by reductions in the threshold where the top rate applies, as well as reductions in the statutory rate applicable at average wage earnings.
Évolution des barèmes des impôts sur le revenu des personnes physiques et des cotisations de sécurité sociale
Les responsables politiques ne sont pas en mesure d’ajuster directement la charge fiscale des revenus du travail mais ils ont la possibilité de réformer les aspects du système fiscal qui sont définis par la loi, et qui déterminent en définitive les taux moyens et marginaux d’imposition. Afin de mettre en lumière les déterminants des taux moyens et marginaux d’imposition des revenus des personnes physiques, ce document étudie, dans une optique rétrospective et internationale, l’évolution des taux légaux de l’impôt sur le revenu des personnes physiques, les seuils d’application de l’impôt sur le revenu et des cotisations salariales de sécurité sociale, ainsi que les autres dispositions légales qui influent sur la charge fiscale des revenus du travail dans les pays de l’OCDE. L’évolution de la différence entre les taux légaux, moyens et marginaux de l’impôt sur le revenu des personnes physiques est également analysée et représentée graphiquement. Par ailleurs, ce document examine l’impact des cotisations salariales de sécurité sociale sur les taux marginaux maximums d’imposition des revenus des personnes physiques. La tendance la plus nette qui se dégage dans les pays de l’OCDE entre 2000 et 2010 est la réduction des taux légaux maximums de l’impôt sur le revenu des personnes physiques. Cette évolution s’est accompagnée de réductions du seuil d’application du taux maximum, ainsi que de réductions du taux légal applicable au salaire moyen.
Classification-JEL: H24; H55; H71
Keywords: cotisations de sécurité sociale, exonération fiscale, impôt sur le revenu des personnes physiques, personal income tax, social security contributions, statutory tax rate, surtax, surtaxe, taux légal d’imposition, tax exemptions
Creation-Date: 2012-07-24
Number: 12
Handle: RePEc:oec:ctpaaa:12-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Carolina Torres
Author-Workplace-Name: OECD
Title: Taxes and Investment in Skills
Abstract: This paper considers the influence of taxes on the financial incentive to invest in human capital and explores the tax treatment of private investment by individuals and employers in post-compulsory education and lifelong learning in 31 OECD countries, India and South Africa. The paper describes targeted personal, corporate and value added tax measures related to education and training and analyses them in terms of their impacts on the incentive to acquire skills and their distributional effects. The desirability of different forms of tax relief for skills formation is examined from the point of view of efficiency, equity and administrative simplicity within the broader context of fiscal policy and the role of government in skills formation beyond compulsory education.
Classification-JEL: H21; H24; H25; I22; J24
Keywords: education finance, human capital, OECD countries, skills formation, tax incentives, tax policy
Creation-Date: 2012-09-17
Number: 13
Handle: RePEc:oec:ctpaaa:13-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Luca Gandullia
Author-Workplace-Name: University of Genoa
Author-Name: Nicola Iacobone
Author-Workplace-Name: University of Genoa
Author-Name: Alastair Thomas
Author-Workplace-Name: OECD
Title: Modelling the Tax Burden on Labour Income in Brazil, China, India, Indonesia and South Africa
Abstract: This paper examines the taxation of labour income in five key emerging economies: Brazil, China, India, Indonesia and South Africa (the “BIICS” countries). The paper highlights the key features of the taxation of labour income in these countries, and then uses this information to model the tax burdens on labour income in each country following the OECD's Taxing Wages methodology. Average and marginal tax wedges in Brazil and China (Shanghai) are found to be similar in size in 2010 to those of many OECD countries. In contrast, India, Indonesia and South Africa (as well as rural China) impose very low average and marginal tax wedges compared to the vast majority of OECD countries. These relatively low tax wedge results are not altogether surprising given that these countries also currently have lower tax-to-GDP ratios than the OECD average. However, the results suggest that, in the long-term, reforms will be necessary in most of the BIICS countries if the labour income base is to significantly contribute to funding the substantial increases in public expenditure, particularly on infrastructure and social insurance, that will inevitably come as these countries continue to grow.
Modéliser la charge fiscale pesant sur les revenus du travail en Afrique du Sud, au Brésil, en Chine, en Inde et en Indonésie
Ce document propose un examen de la taxation des revenus du travail dans cinq grandes économies émergentes, à savoir l’Afrique du Sud, le Brésil, la Chine, l’Inde et l’Indonésie. Il met l’accent sur les principales caractéristiques des régimes d’imposition en vigueur dans ces pays, les informations correspondantes étant ensuite utilisées pour modéliser la charge fiscale pesant sur les revenus du travail dans chaque pays à l’aide de la même méthodologie que celle suivie par l’OCDE pour sa publication intitulée Les impôts sur les salaires. Il apparaît qu’au Brésil et en Chine (Shanghai), les coins fiscaux moyens et marginaux sont du même ordre que ceux d’un grand nombre de pays de l’OCDE en 2010. En Afrique du Sud, en Inde et en Indonésie (ainsi qu’en Chine rurale) en revanche, les coins fiscaux moyens et marginaux sont très faibles en comparaison de ceux de la grande majorité des pays de l’OCDE. Le niveau relativement bas de ces chiffres n’est pas vraiment surprenant étant donné que ces pays affichent actuellement des rapports impôt/PIB inférieurs à la moyenne de l’OCDE. Il donne cependant à penser que, sur le long terme, des réformes seront nécessaires dans la plupart de ces économies si la taxation des revenus du travail doit apporter une contribution notable au financement des hausses considérables des dépenses publiques, en particulier dans les domaines des infrastructures et de la sécurité sociale, qu’elles devront inévitablement assumer à mesure qu’elles continueront à croître.
Classification-JEL: H24; H55
Keywords: coin fiscal, cotisations de sécurité sociale, impôt sur le revenu des personnes physiques, labour income, personal income tax, revenus du travail, social security contributions, tax wedge
Creation-Date: 2012-12-12
Number: 14
Handle: RePEc:oec:ctpaaa:14-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Dominique Paturot
Author-Workplace-Name: OECD
Author-Name: Kirsti Mellbye
Author-Workplace-Name: OECD
Author-Name: Bert Brys
Author-Workplace-Name: OECD
Title: Average Personal Income Tax Rate and Tax Wedge Progression in OECD Countries
Abstract: The statutory progressivity of the income taxes paid by wage earners, net of the standard cash benefits they receive, depend on the design and interaction of personal income taxes, social security contributions (SSCs) and cash benefits. In order to capture their combined impact, this paper presents statutory tax progressivity indicators for the 34 OECD member countries on the basis of average effective income tax rates and tax wedges which are calculated using the OECD’s Taxing Wages framework. The analysis shows a decreasing pattern of tax progressivity across income levels. In some countries, the tax system becomes regressive when the SSC ceiling has been reached. Also, child benefits increase progressivity (especially at low income levels) and their effect is larger than the flattening impact of SSCs, except at top income levels. Reductions in SSCs targeted at low-incomes and dependant spouse allowances increase progressivity in some OECD countries. Income-splitting systems typically have the opposite effect.
Progression des taux moyens de l'impôt sur le revenu des personnes physiques et du coin fiscal dans les pays de l'OCDE
La progressivité légale des impôts sur le revenu payés par les salariés, après déduction des prestations en espèces qu’ils perçoivent, dépend de la conception des impôts sur le revenu des personnes physiques, des cotisations de sécurité sociale (CSS) et des prestations en espèces ainsi que de leurs interactions. Afin de déterminer leur effet combiné, cette étude présente des indicateurs de la progressivité légale des impôts pour les 34 pays membres de l’OCDE, en s’appuyant sur les taux moyens effectifs de l’impôt sur le revenu et sur les coins fiscaux calculés en utilisant le modèle établi par la publication de l’OCDE « Les impôts sur les salaires ». L’analyse révèle que la progressivité diminue à mesure que les niveaux de revenu augmentent. Dans certains pays, le système fiscal devient régressif lorsque le plafond des CSS est atteint. De même, les allocations familiales augmentent la progressivité (surtout pour les bas revenus), et leur incidence est supérieure à l’effet d’atténuation des CSS, sauf pour les hauts salaires. Les réductions de CSS ciblant les bas revenus et les indemnités pour conjoint à charge augmentent la progressivité dans certains pays de l’OCDE. En général, le régime du quotient familial produit l’effet inverse.
Classification-JEL: H24; H55
Keywords: cotisations de sécurité sociale, impôt sur le revenu des personnes physiques, personal income tax, progressivité de l’impôt, social security contributions, tax progressivity
Creation-Date: 2013-02-20
Number: 15
Handle: RePEc:oec:ctpaaa:15-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Bert Brys
Author-Workplace-Name: OECD
Author-Name: Carolina Torres
Author-Workplace-Name: Ontario Ministry of Finance
Title: Effective Personal Tax Rates on Marginal Skills Investments in OECD Countries: A New Methodology
Abstract: This paper presents a new methodology to calculate effective tax rates on the marginal return on an investment in skills within a discounted cash-flow investment framework. This approach takes into account costs including forgone labour earnings and the direct costs of skills formation, as well as the earnings premium and the return of an alternative investment in capital income. The earnings premium necessary to pursue a skills investment is calculated endogenously. This framework can be used to analyse the financial incentives to invest in skills and the impact of different policies for financing post-secondary education and/or professional training. The paper looks in particular at the effects of personal taxes (possibly net of benefits received) on incentives to acquire skills by estimating the effective tax rate on the return on a marginal skill investment – that is, one where the resulting increase in earnings is just enough to make the investment financially worthwhile; this “margin” can span multiple years. This approach may be helpful to policymakers in assessing the impact of tax progressivity and/ or the withdrawal of benefits and the case for tax breaks for postsecondary education and training, and could be extended to compare the impact of tax breaks relative to other policy instruments to stimulate skills investments. The paper includes some illustrative calculations in order to demonstrate how to apply the methodology within the OECD's Taxing Wages framework for all OECD countries, which is left for follow-up work.
Calcul des taux effectifs de l'impôt sur le revenu des personnes physiques applicables aux investissements marginaux dans les compétences dans les pays de l'OCDE : Nouvelle méthodologie
Ce document présente une nouvelle méthodologie pour calculer les taux effectifs de l'impôt sur le rendement marginal d'un investissement dans les compétences en utilisant une méthode d'actualisation des flux financiers. Cette approche prend en compte les coûts, y compris le manque à gagner en termes de revenu du travail et les coûts directs d’acquisition des compétences, ainsi que l’avantage salarial et le rendement d’un investissement alternatif dans un revenu du capital. L'avantage salarial nécessaire pour justifier un investissement dans les compétences est calculé de façon endogène. Ce cadre peut être utilisé pour analyser les incitations financières à investir dans les compétences et l’incidence de différentes stratégies de financement de l'enseignement postsecondaire et/ou de la formation professionnelle. Ce document examine en particulier les effets des impôts sur les personnes physiques (si possible nets des prestations reçues) sur les incitations à acquérir des compétences, en estimant le taux effectif d'imposition du rendement généré par un investissement marginal dans les compétences : l'augmentation de salaire générée par cet investissement est juste suffisante pour rendre l’investissement financièrement attractif ; cette « marge » peut s’étaler sur plusieurs années. Cette approche peut aider les responsables publics à estimer l'impact de la progressivité de l’impôt et/ou de la suppression de prestations, ainsi que l'opportunité d’allégements fiscaux en faveur de l'enseignement et de la formation postsecondaires ; elle peut également servir à comparer l'impact d'allégements fiscaux par rapport à d’autres instruments d’action visant à encourager les investissements dans les compétences. Ce document présente des exemples de calcul afin d’illustrer comment appliquer cette méthodologie dans le cadre de la publication de l’OCDE Les impôts sur les salaires pour l'ensemble des pays de l'OCDE, ce qui fera l'objet de travaux de suivi.
Classification-JEL: H21; H24
Keywords: capital humain, compétences, cotisations de sécurité sociale, effective tax rate, human capital, impôt sur le revenu des personnes physiques, personal income tax, skills, social security contributions, taux effectifs d’imposition
Creation-Date: 2013-08-01
Number: 16
Handle: RePEc:oec:ctpaaa:16-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Pierre LeBlanc
Author-Workplace-Name: OECD
Author-Name: Stephen Matthews
Author-Workplace-Name: OECD
Author-Name: Kirsti Mellbye
Author-Workplace-Name: OECD
Title: The Tax Policy Landscape Five Years after the Crisis
Abstract: The height of the economic and financial crisis is now well past, but its aftermath remains wide-ranging, with many OECD countries still some way from restoring strong and sustainable economic growth. Even before the Great Recession OECD economies faced a range of challenges, most notably from globalisation, but also other challenges such as climates change, growing inequality and population ageing. Against this background, this paper discusses how tax policies have responded to fiscal and macroeconomic developments over the past five years and these longer-term structural economic developments.
Le paysage des politiques fiscales, cinq ans après la crise
Le paroxysme de la crise économique et financière est loin derrière nous, mais les séquelles restent multiples, et de nombreux pays de l’OCDE ont encore du chemin à parcourir avant de retrouver une croissance économique forte et durable. Avant même la Grande récession, les économies de l’OCDE se heurtaient déjà à un éventail de problématiques telles que, notamment, les incidences de la mondialisation, mais aussi à des défis comme le changement climatique, le creusement des inégalités et le vieillissement de la population. Dans ce contexte, ce rapport explique comment les politiques fiscales se sont adaptées face aux évolutions budgétaires et macroéconomiques de ces cinq dernières années et face à ces bouleversements économiques structurels de plus long terme.
Creation-Date: 2013-09-04
Number: 17
Handle: RePEc:oec:ctpaaa:17-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Bert Brys
Author-Workplace-Name: OECD
Author-Name: Stephen Matthews
Author-Workplace-Name: OECD
Author-Name: Richard Herd
Author-Workplace-Name: OECD
Author-Name: Xiao Wang
Author-Workplace-Name: OECD
Title: Tax Policy and Tax Reform in the People's Republic of China
Abstract: This paper compares the tax system in China with the tax system in OECD countries and the tax reforms China and OECD countries have implemented in the past. The analysis focuses on those taxes and tax issues which are currently on China’s reform agenda, including the consumption taxes (especially the integration of the “business tax” into the VAT), environmentally-related taxes, the personal income tax, fiscal relations between the central and sub-central levels of government and property taxes. The paper provides a (preliminary) analysis of the tax-to-GDP ratio and the tax mix in China as well as the average and marginal tax wedge on labour income, by applying the OECD’s Revenue Statistics and Taxing Wages methodology. Although a country’s culture, traditions and legal system play an important part in shaping its tax regime and how it can be reformed, the paper also reviews the general design issues on how to make the tax system in China more growth-friendly, simple and transparent, less distortive and fairer. The paper contains a detailed discussion and evaluation of each tax and considers possible directions for future tax reform in China.
Politique et réformes fiscales en République Populaire de Chine
Ce document compare le système fiscal en Chine avec celui des pays de l’OCDE en tenant compte des réformes que ces pays ont mis en oeuvre par le passé. L’analyse se concentre sur les impôts et les questions fiscales pour lesquels la Chine envisage une réforme, y compris les impôts sur la consommation (notamment l’intégration de « la taxe d’affaires » dans la TVA), les taxes liées à l’environnement, l’impôt sur le revenu des personnes physiques, les relations budgétaires entre l’administration centrale et les administrations infranationales, ainsi que les impôts fonciers. Ce document présente une analyse (préliminaire) du ratio impôts/PIB et de la structure fiscale en Chine, ainsi que du coin fiscal moyen et marginal sur les revenus du travail, en appliquant la méthodologie utilisée dans les publications de l’OCDE Statistiques des recettes publiques et Les impôts sur les salaires. Bien que la culture, les traditions et le système juridique d’un pays jouent un rôle important pour façonner son régime fiscal et influent sur les possibilités de réforme, ce document aborde également des questions générales de conception en vue de déterminer comment faire en sorte que le système fiscal en Chine soit plus favorable à la croissance, simple, transparent et équitable, et induise moins de distorsions. Ce document examine et évalue chaque impôt en détail et réfléchit aux orientations possibles de la future réforme fiscale en Chine.
Classification-JEL: H2; H7
Keywords: China, Chine, politique fiscale, réforme fiscale, tax policy, tax reform
Creation-Date: 2013-09-04
Number: 18
Handle: RePEc:oec:ctpaaa:18-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Michelle Harding
Author-Workplace-Name: OECD
Title: Taxation of Dividend, Interest, and Capital Gain Income
Abstract: This paper provides an overview of the differing ways in which capital income is taxed across the OECD. It provides an analytical framework which summarises the statutory tax treatment of dividend income, interest income and capital gains on shares and real property across the OECD, considering where appropriate the interaction of corporate and personal tax systems. It describes the different approaches to the tax treatment of these income types at progressive stages of taxation and concludes the discussion of each income type by summarising the different systems in diagrammatic form. For each income type, the paper presents worked calculations of the maximum combined statutory tax rates in each OECD country, under the tax treatment and rates applying as at 1 July 2012. These treatments and rates may have changed since this date and the paper should not be interpreted as reflecting the current taxation of capital income in OECD countries.
Ce document donne un aperçu des diverses formes d’imposition des revenus du capital dans les pays de l’OCDE. Il offre un cadre d’analyse qui résume le traitement fiscal légal des dividendes, des intérêts perçus et des plus-values réalisées sur les actions et sur les biens immobiliers dans les pays de l’OCDE, en tenant compte le cas échéant de l’interaction entre le régime de l’impôt sur les sociétés et celui de l’impôt sur le revenu des personnes physiques. Il décrit les différentes approches du traitement fiscal de ces types de revenu à différents niveaux du barème progressif et conclut l’analyse de chaque type de revenu par des diagrammes qui résument les différents systèmes existants. Pour chaque type de revenu, ce document présente des calculs élaborés des taux maximums d’imposition combinés en vigueur dans chaque pays de l’OCDE, en fonction du régime fiscal et des taux applicables au 1er juillet 2012. Ces régimes et taux ont peut-être été modifiés depuis cette date, de sorte que ce document ne reflète pas nécessairement la situation actuelle de la fiscalité des revenus du capital dans les pays de l’OCDE.
Creation-Date: 2013-11-07
Number: 19
Handle: RePEc:oec:ctpaaa:19-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Michelle Harding
Author-Workplace-Name: OECD
Title: Personal Tax Treatment of Company Cars and Commuting Expenses: Estimating the Fiscal and Environmental Costs
Abstract: Company cars form a large proportion of the car fleet in many OECD countries and are also influential in determining the composition of the wider vehicle fleet. When employees provided with a company car use that car for personal purposes, personal income tax rules value the benefit in a number of different ways. How accurate these rules are in valuing the benefit has important implications for tax revenue, the environment and other social impacts such as congestion. This paper outlines the tax treatment of company cars and commuting expenses in 27 OECD countries and one partner country. It compares these tax settings with a stylised “benchmark” tax treatment that estimates the full value of the benefit received by employees with company vehicles. The paper demonstrates that the estimated tax expenditures associated with company car taxation in these countries in 2012 can be quite considerable. Significantly, from an environmental perspective, in most countries employees faced no additional increase in tax payable in response to an increase in the assumption of distance driven.
Traitement des véhicules de société et des frais de transport au regard de l'impôt sur le revenu des personnes physiques : Estimation des coûts budgétaires et environnementaux
Dans de nombreux pays de l’OCDE, les véhicules de société constituent une grande partie de la flotte automobile, et influent également sur la composition du parc de véhicules au sens large. Lorsque les salariés qui disposent d’un véhicule de société l’utilisent pour leur usage personnel, les dispositions relatives à l’impôt sur le revenu valorisent cet avantage de différentes manières. La capacité de ces dispositions à évaluer correctement cet avantage a d’importantes conséquences en matière de recettes fiscales, d’impact environnemental et d’autres coûts sociaux tels que les embouteillages. Ce document présente le régime fiscal des véhicules de société et des frais de transport dans 27 pays de l’OCDE et dans un pays partenaire. Il compare ce régime fiscal avec un régime « de référence » simplifié qui estime la valeur globale de l’avantage dont bénéficient les salariés disposant de véhicules de société. Ce document montre que les dépenses fiscales estimées qui sont associées à l’imposition des véhicules de société dans ces pays en 2012 peuvent être tout à fait considérables. D’un point de vue environnemental, on constate surtout que dans la plupart des pays, les salariés ne subissent pas de hausse d’impôt suite à une augmentation de l’hypothèse relative à la distance parcourue avec leur véhicule de société.
Creation-Date: 2014-07-11
Number: 20
Handle: RePEc:oec:ctpaaa:20-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Michelle Harding
Author-Workplace-Name: OECD
Title: The Diesel Differential: Differences in the Tax Treatment of Gasoline and Diesel for Road Use
Abstract: Diesel and gasoline account for around 95% of energy used for road transport in the OECD and for the largest share of revenue from taxes on energy. In 33 out of 34 OECD countries, diesel fuel is taxed at lower rates than gasoline both in terms of energy and carbon content. To assess whether this difference is warranted from an environmental perspective, this paper examines the rationales for taxing both fuels, considering the externalities (including local air pollution, carbon emissions and other social costs related to road transport) associated with the use of each fuel and the fuel efficiency advantage of diesel vehicles. The revenue, distributional and competitiveness consequences of increasing tax rates on diesel are also briefly considered and the revenue effects of the tax treatment of diesel are shown to be significant. We conclude that the externalities associated with each fuel show that the lower tax rates that currently apply to diesel fuel are not justifiable from an environmental perspective. Reduction of the diesel differential is warranted. A gradual approach to removing the differential would allow the adverse distributional and competitiveness impacts to be mitigated during the transitional phase.
Avantage fiscal en faveur du gazole : différences de traitement fiscal de l'essence et du gazole à usage routier
Le gazole et l’essence représentent environ 95 % de l’énergie consommée pour le transport routier dans la zone OCDE et génèrent l’essentiel des recettes issues des taxes sur l’énergie. Dans 33 des 34 pays de l’OCDE, le gazole est taxé à des taux inférieurs à ceux applicables à l’essence, tant du point de vue du contenu énergétique que de la teneur en carbone. Afin de déterminer si cette différence est justifiée d’un point de vue environnemental, ce document examine les raisons qui sous-tendent l’imposition de ces deux types de carburants, tenant compte des externalités (pollution atmosphérique locale, émissions de carbone et autres coûts sociaux induits par le transport routier, etc.) associées à l’utilisation de chacun de ces carburants et la moindre consommation des véhicules diesel. Les conséquences sur le plan des recettes, de la distribution et de la compétitivité d’un relèvement des taux d’imposition du gazole font également l’objet d’une analyse succincte et les répercussions de la taxation du gazole sur les recettes fiscale s’avèrent significatives. En conclusion, les externalités associées à chacun de ces carburants ne justifient pas, d’un point de vue environnemental, les taux d’imposition plus faibles actuellement réservés au gazole. Une réduction de l’avantage fiscal en faveur du gazole est justifiée. Une réduction progressive de cet avantage permettrait l'atténuation dans la phase transitoire des effets défavorables sur la distribution et la compétitivité.
Creation-Date: 2014-07-11
Number: 21
Handle: RePEc:oec:ctpaaa:21-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Ján Remeta
Author-Workplace-Name: Ministry of Finance, Slovak Republic
Author-Name: Sarah Perret
Author-Workplace-Name: OECD
Author-Name: Martin Jareš
Author-Workplace-Name: OECD
Author-Name: Bert Brys
Author-Workplace-Name: OECD
Title: Moving Beyond the Flat Tax - Tax Policy Reform in the Slovak Republic
Abstract: The Slovak Republic was among the fastest growing OECD economies in the last decade. It is broadly recognised that the 2004 tax reform contributed to this success. Ten years after this fundamental reform, however, the time has come to re-evaluate some of the key characteristics of the Slovak tax system. The Slovak economy faces multiple challenges including an ageing population, a persistently high unemployment rate, significant regional disparities, skills gaps and risks related to the increasing international competition for mobile capital. Can the Slovak tax system in its present form prevail against these headwinds? The paper shows that the current tax system suffers from weaknesses that constrain its capacity to raise additional revenues and to create the conditions for inclusive and sustainable economic growth. Although measures have recently been introduced to address some of these challenges, additional tax reforms and a further strengthening of the tax administration will be needed. The OECD worked jointly with the Institute for Financial Policy (IFP) of the Slovak Ministry of Finance to provide an overall assessment of the Slovak tax system and recommendations for future tax policy reforms.
Classification-JEL: H2
Keywords: Slovak Republic, tax policy, tax reform
Creation-Date: 2015-03-12
Number: 22
Handle: RePEc:oec:ctpaaa:22-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Florens Flues
Author-Workplace-Name: OECD
Author-Name: Alastair Thomas
Author-Workplace-Name: OECD
Title: The distributional effects of energy taxes
Abstract: New evidence for 21 OECD countries shows that the distributional effects of energy taxes differ by energy carrier. On an expenditure basis, taxes on transport fuels are not regressive on average, as households in lower expenditure deciles spend a lower proportion of their expenditure on taxes on transport fuels. While the unweighted 21-country average of the proportion of income spent on transport fuel taxes is highest for households in the lowest and in the middle deciles, there is heterogeneity across countries. Some countries show progressive effects of taxes on transport fuels both on an expenditure and an income basis, while others show more proportional effects or tend to place the highest burden on middle expenditure deciles. Taxes on heating fuels are slightly regressive, i.e., the percentage of expenditure spent on them decreases with expenditure. Taxes on electricity are more regressive than taxes on heating fuels.
Les effets redistributifs des taxes sur l'énergie
De nouvelles données portant sur 21 pays de l’OCDE montrent que les effets redistributifs des taxes sur l’énergie varient selon le produit énergétique considéré. Selon l’approche fondée sur les dépenses, les taxes sur les carburants ne sont pas régressives en moyenne, car les ménages appartenant aux déciles inférieurs de dépenses consacrent une fraction plus faible de leurs dépenses à ces taxes. Alors que la moyenne non pondérée pour 21 pays de la proportion du revenu consacrée aux taxes sur les carburants est la plus élevée pour les ménages appartenant aux déciles inférieur et moyen, il existe une hétérogénéité entre pays. Dans certains pays, les taxes sur les carburants ont des effets progressifs à la fois avec l’approche fondée sur les dépenses et sur les revenus, alors que dans d’autres, les effets sont plus proportionnels ou la charge la plus lourde pèse sur les déciles moyens de dépenses. Les taxes sur les combustibles sont légèrement régressives, c’est-à-dire que le pourcentage de dépenses qui leur est consacré diminue avec les dépenses. Les taxes sur l’électricité sont plus régressives que celles sur les combustibles.
Classification-JEL: H23; Q40; Q52
Keywords: distribution services, Energy taxation
Creation-Date: 2015-05-01
Number: 23
Handle: RePEc:oec:ctpaaa:23-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Alessandro Modica
Author-Workplace-Name: OECD
Author-Name: Thomas Neubig
Author-Workplace-Name: OECD
Title: Taxation of Knowledge-Based Capital: Non-R&D Investments, Average Effective Tax Rates, Internal Vs. External KBC Development and Tax Limitations
Abstract: This paper extends the tax analysis of knowledge-based capital (KBC) in several dimensions. The paper analyses non-R&D KBC: computer software, architectural and engineering designs, and economic competencies which account for over 70% of total KBC. The paper analyses the tax treatment of internally-developed KBC which is used in production by the developer versus KBC sold to third-party producers. The current tax rules generally favour internally-developed KBC, which disadvantages many SMEs and start-up companies specializing in innovation. The analysis reports two average effective tax rates (ETRs) depending on investors’ considerations of their investment opportunities. When KBC is unique, earns excess returns due to market power, or involves financing-constraints, ETRs are high despite immediate expensing. The paper also analyses the effects of tax limitations, where many SMEs and start-up companies can’t benefit from tax credits and deductions until having sufficient tax liability.
L'imposition du capital intellectuel : Investissements non liés à la R-D, taux moyens effectifs d'imposition, développement interne/externe du capital intellectuel et restrictions fiscales
Ce document prolonge l’analyse fiscale du capital intellectuel dans différents domaines. Il analyse le capital intellectuel non lié à la R-D : les logiciels informatiques, la conception architecturale et technique, et les compétences économiques qui représentent plus de 70 % du capital intellectuel total. Ce document examine le traitement fiscal du capital intellectuel développé en interne, qui est employé en production par le développeur, par rapport au capital intellectuel vendu à des producteurs tiers. Les règles fiscales actuelles favorisent généralement le capital intellectuel développé en interne, ce qui pénalise de nombreuses PME et jeunes entreprises qui se spécialisent dans l’innovation. L’analyse met en évidence deux taux moyens effectifs d’imposition (TMEI) en fonction de l’évaluation par les investisseurs des opportunités d’investissement. Lorsque le capital intellectuel est unique, génère un rendement excessif en raison de l’existence d’un pouvoir de marché ou implique des contraintes de financement, les TMEI sont élevés malgré une passation immédiate en charges. Ce document analyse également les conséquences des restrictions fiscales, sous l’effet desquelles de nombreuses PME et jeunes entreprises ne peuvent pas bénéficier de crédits et d’allégements d’impôts tant que le montant de leur impôt n’atteint pas un niveau suffisant.
Creation-Date: 2016-03-10
Number: 24
Handle: RePEc:oec:ctpaaa:24-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Sarah Perret
Author-Workplace-Name: OCDE
Author-Name: Alain Charlet
Author-Name: Bert Brys
Author-Workplace-Name: OCDE
Title: Atteindre l'émergence : Les défis fiscaux de la Côte d'Ivoire
Abstract: La Côte d’Ivoire s’est fixé comme objectif d’atteindre le statut d’économie émergente d’ici 2020. Cependant, les recettes fiscales de la Côte d’Ivoire sont insuffisantes au regard de ses besoins croissants d’investissements publics en matière d’infrastructure, d’éducation et de santé. La politique fiscale n’est pas qu’une question de ressources : la Côte d’Ivoire devra également chercher à réformer un système qui génère de nombreuses distorsions dans le comportement des acteurs économiques, qui ne joue qu’un rôle limité dans la redistribution et l’inclusion et qui manque de transparence. Pour cela, les priorités devront être d’évoluer vers une structure fiscale où les impôts qui créent le plus de distorsions, tels que les droits de douane, sont progressivement remplacés par des impôts plus neutres ; d’élargir le filet fiscal à un plus grand nombre de contribuables afin d’éviter que la charge fiscale ne pèse que sur un nombre limité d’acteurs du secteur formel ; de simplifier et d’accroître la cohérence du système fiscal ; de rationaliser les nombreuses exonérations, particulièrement en matière de TVA, d’impôt sur les sociétés et d’impôt sur le revenu; de renforcer les règles en matière de fiscalité internationale pour tendre à ce que les entreprises multinationales paient leur juste part d’impôts ; de renforcer les capacités de l’administration fiscale ; et de promouvoir le « civisme fiscal ». La Côte d’Ivoire ne pourra pas se contenter de réformes partielles mais a besoin d’une réforme fiscale de fond mise en oeuvre de façon graduelle pour répondre à ses besoins d’économie émergente.
From a Developing to an Emerging Economy: Côte d'Ivoire's Tax Policy Challenges
Côte d’Ivoire aims at reaching emerging country status by 2020. However, Côte d'Ivoire's tax revenues are not sufficient to finance its growing needs for public investment in infrastructure, education and health. Tax policy is not just a question of resources—Côte d’Ivoire will also have to attempt to reform a tax system which distorts behaviour in many parts of the economy, which plays only a limited role in redistribution and inclusiveness, and lacks transparency. The authorities will have to prioritise a shift in the tax mix that gradually replaces the most distortive taxes, such as customs duties, with more neutral taxes; cast the tax net more widely to prevent that a limited number of taxpayers in the formal sector bear most of the tax burden; make the tax system simpler and more coherent; rationalise the many exemptions, especially in VAT, corporate tax and personal income tax; strengthen international tax rules to encourage multinationals to pay their fair share of taxes; increase the capacity of tax authorities; and enhance tax morale. Côte d’Ivoire cannot settle for partial reforms—it needs to phase in a comprehensive tax reform to meet its needs as an emerging economy.
Classification-JEL: H2
Creation-Date: 2016-07-01
Number: 25
Handle: RePEc:oec:ctpaaa:25-FR
Template-type: ReDIF-Paper 1.0
Author-Name: Bert Brys
Author-Workplace-Name: OECD
Author-Name: Sarah Perret
Author-Workplace-Name: OECD
Author-Name: Alastair Thomas
Author-Workplace-Name: OECD
Author-Name: Pierce O’Reilly
Author-Workplace-Name: OECD
Title: Tax Design for Inclusive Economic Growth
Abstract: This paper examines how the design features of countries’ tax systems can be strengthened to support inclusive economic growth. In the context of the OECD’s New Approaches to Economic Challenges (NAEC) initiative, this paper seeks to re-assess the policy recommendations stemming from the 2008 Tax and Economic Growth report, which focused on the impact of taxes on economic growth from an efficiency perspective, to more explicitly take account of equity considerations. Drawing on recent developments in the academic literature and in countries’ tax policies, the paper examines how the basic design aspects of each tax can be improved to better achieve inclusive growth. It also looks at how the interactions of taxes with other factors – both within and beyond tax systems – affect their efficiency and equity outcomes. The paper more generally emphasises the need to look at tax and benefit systems as a whole to fully assess the efficiency and equity implications of tax policies. The inclusive design of domestic tax policies needs to go hand in hand with the implementation of international tax rules and mechanisms that prevent tax evasion and tax avoidance. It also requires measures that strengthen the functioning of the tax administration and incentivise agents to operate within the formal economy. The paper lays the groundwork for future empirical work to support tax design for inclusive growth.
Fiscalité et croissance économique inclusive
Ce document analyse comment les pays peuvent améliorer la conception de leur système fiscal de manière à soutenir une croissance économique inclusive. Dans le contexte de l’initiative de l’OCDE relative aux nouvelles approches face aux défis économiques (NAEC), ce document s’attache à réévaluer les recommandations d’action découlant du rapport de 2008 sur la fiscalité et la croissance économique, qui examinait l’incidence des impôts sur la croissance du point de vue de l’efficience, en prenant plus spécifiquement en compte les questions d’équité. En s’appuyant sur les évolutions récentes dans les ouvrages universitaires et dans les politiques fiscales nationales, ce rapport examine comment améliorer les aspects conceptuels fondamentaux de chaque impôt pour favoriser la croissance inclusive. Il étudie également les interactions des impôts avec d’autres facteurs – au sein des systèmes fiscaux et au-delà – et leurs effets sur les résultats en matière d’efficience et d’équité. Plus généralement, ce document souligne la nécessité d’appréhender les systèmes de prélèvements et de prestations dans leur globalité afin de mesurer précisément l’incidence des politiques fiscales sur l’efficience et l’équité. La conception inclusive des politiques fiscales nationales doit aller de pair avec la mise en oeuvre de règles et mécanismes fiscaux internationaux permettant d’empêcher la fraude fiscale et d’inciter les agents à investir la sphère de l’économie formelle, conjugués à des mesures visant à renforcer le fonctionnement des administrations fiscales. Ce document jette les bases des travaux empiriques que l’OCDE entreprendra à l’appui d’une conception des impôts au service de la croissance inclusive.
Creation-Date: 2016-07-18
Number: 26
Handle: RePEc:oec:ctpaaa:26-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Thomas Neubig
Author-Workplace-Name: OECD
Author-Name: Fernando Galindo-Rueda
Author-Workplace-Name: OECD
Author-Name: Silvia Appelt
Author-Workplace-Name: OECD
Author-Name: Chiara Criscuolo
Author-Workplace-Name: OECD
Author-Name: Matej Bajgar
Author-Workplace-Name: OECD
Title: Fiscal incentives for R&D and innovation in a diverse world
Abstract: Public policy has an important role to play in promoting research and development (R&D) the development, diffusion, and use of new knowledge and innovations. Fiscal incentives, including tax policies, should be directed at specific barriers, impediments or synergies to facilitate the desired level of investment in R&D and innovations. Without careful design, policies can have unintended consequences such as favouring incumbent firms, encouraging small firms to undertake less efficient activities, or creating arbitrage and rent-seeking activity. R&D tax policy needs to be considered in the context of the country’s general tax policies, its broader innovation policy mix and its other R&D support policies. More R&D activity in one country does not necessarily result in an overall increase in global innovation if it is simply shifted from another country. More research is needed to determine the extent to which R&D fiscal incentives in one country increase overall R&D, the quality of that R&D, and its positive spillovers to other sectors of the economy and other countries.
Les incitations fiscales en faveur de la R-D et de l'innovation dans un monde diversifié
La politique publique a un rôle important à jouer pour promouvoir la recherche et le développement, la création, la diffusion et l’utilisation de nouvelles connaissances et d’innovations. Les incitations fiscales, y compris les politiques fiscales, doivent cibler des obstacles, freins ou synergies spécifiques de manière à obtenir le niveau souhaité d’investissements dans la R-D et dans l’innovation. Si elles ne sont pas soigneusement conçues, ces politiques peuvent avoir des conséquences fortuites, comme favoriser les entreprises en place, inciter les petites entreprises à entreprendre des activités moins efficientes ou ouvrir la voie à l’arbitrage et à la recherche de rentes. Les mesures fiscales en faveur de la R-D doivent être appréhendées dans le contexte des politiques fiscales générales du pays, de l’ensemble des actions menées en faveur de l’innovation et de ses autres politiques d’aide à la R-D. Une intensification des activités de R-D dans un pays n’entraîne pas nécessairement une augmentation globale de l’innovation mondiale si elle correspond à un simple transfert d’un autre pays. Des travaux supplémentaires sont nécessaires pour déterminer dans quelle mesure les incitations fiscales en faveur de la R-D dans un pays augmentent le niveau global de R-D, la qualité de cette R-D et ses retombées positives dans d’autres secteurs de l’économie et dans d’autres pays.
Creation-Date: 2016-09-13
Number: 27
Handle: RePEc:oec:ctpaaa:27-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Hayley Reynolds
Author-Workplace-Name: National Treasury, South Africa
Author-Name: Thomas Neubig
Author-Workplace-Name: OECD
Title: Distinguishing between “normal” and “excess” returns for tax policy
Abstract: This paper explores the practical challenges tax policy analysts face when trying to apply differential taxation to “normal” and “excess” returns. The distinction between these two elements is being increasingly used in tax policy. The problem is that there is no clear definition for a “normal” return. While it is often equated to a risk-free return, or the return available on a ten-year government bond, many commentators agree that it should incorporate a risk element. The typical rationale for applying differential taxation stems from the desire to achieve neutral taxation, i.e. minimise the real economic responses of taxpayers due to the wedge taxation imposes between before-tax and after-tax returns. A set of important questions are raised for tax policy analysts to consider. Two crucial factors that make the distinction challenging are heterogeneity and uncertainty. Given the potential for unintended consequences, this is an important issue that warrants more discussion and thought.
Politique fiscale : distinguer entre rendements « normaux » et « excessifs »
Le présent document est consacré aux difficultés pratiques auxquelles les analystes de la politique fiscale sont confrontés lorsqu’ils essaient d’appliquer une imposition différenciée aux rendements selon qu’ils sont considérés comme « normaux » ou « excessifs ». Cette distinction est de plus en plus utilisée en politique fiscale. Le problème est qu’il n’existe pas de définition précise de ce qu’est un rendement « normal ». S’il est souvent assimilé à un rendement sur un actif sans risque, ou au rendement d’une obligation d’État à dix ans, nombre de commentateurs conviennent qu’il conviendrait d’y adjoindre un élément de risque. Le raisonnement ordinairement utilisé pour appliquer une imposition différenciée vient de la volonté d’assurer la neutralité de l’imposition, c’est-à-dire de minimiser les réponses économiques réelles des contribuables au coin fiscal qu’une imposition différenciée produit entre les rendements avant et après impôt. Ce point soulève plusieurs questions importantes que les analystes de la politique fiscale se doivent de prendre en compte. Ainsi, l’hétérogénéité et l’incertitude sont deux facteurs cruciaux qui rendent cette distinction difficile à manier. Étant donné les risques de conséquences non souhaitées, il s’agit là d’une question importante qui mérite que l’on en discute et que l’on y réfléchisse de manière plus approfondie.
Creation-Date: 2016-11-11
Number: 28
Handle: RePEc:oec:ctpaaa:28-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Alastair Thomas
Author-Workplace-Name: OECD
Author-Name: Pierce O’Reilly
Author-Workplace-Name: OECD
Title: The Impact of Tax and Benefit Systems on the Workforce Participation Incentives of Women
Abstract: This paper examines the impact of tax and benefit systems on the incentives for second earners to enter formal employment. The paper highlights how various tax design features create greater participation disincentives for second earners than for primary earners or single individuals. As second earners in OECD countries are more often women, these greater disincentives create significant gender-equity concerns. As second earners are also typically highly responsive to work disincentives, these features are likely to negatively impact economic growth. These disincentives stem from a range of policies including the choice of family-based rather than individual-based taxation, the use of dependent spouse tax credits and allowances, and the use of tax credits and benefits based on family rather than individual income. Reform options to address these issues will depend on countries’ existing tax policy design choices. For countries where individual-based taxation is combined with some family-based provisions, reform of these family-based provisions to lessen their impact on second earner work disincentives may be warranted. For countries with family-based tax systems, the introduction of some individual-based provisions could be considered to mitigate the negative effects of family-based taxation on second earner work incentives.
Creation-Date: 2016-12-14
Number: 29
Handle: RePEc:oec:ctpaaa:29-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Florens Flues
Author-Name: Kurt van Dender
Title: The impact of energy taxes on the affordability of domestic energy
Abstract: Energy affordability can be defined as a household’s ability to pay for necessary levels of energy use within normal spending patterns. This paper uses three indicators to measure energy affordability risk in 20 OECD countries. Energy affordability risk differs widely between countries. The countries with the highest GDP per capita tend to have the lowest levels of energy affordability risk. The paper then analyses how indicators of energy affordability change in response to a hypothetical tax reform that increases taxes on natural gas, heating oil and electricity in most countries analysed. Results show that, if combined with an income-tested cash transfer using one third of the change in revenue resulting from the tax reform, the reform generally improves energy affordability. If combined with a lump-sum transfer instead, results show that energy affordability increases only according to the most selective of the three indicators.
Classification-JEL: H23; I32; I38; Q48; Q52
Keywords: carbon pricing, distributional effects, energy affordability, energy poverty, energy taxation
Creation-Date: 2017-05-11
Number: 30
Handle: RePEc:oec:ctpaaa:30-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Johanna Arlinghaus
Author-Workplace-Name: OECD
Author-Name: Kurt van Dender
Author-Workplace-Name: OECD
Title: The environmental tax and subsidy reform in Mexico
Abstract: In a bold policy effort, Mexico recently moved away from subsidies to transport fuels, increased tax rates on these fuels and introduced a carbon tax. This paper analyses these reforms using a broad set of criteria that consider the main practical dimensions of environmental policy design: environmental effectiveness, equity and distributional impacts, broader tax system impacts, macroeconomic effects, compliance and administration, policy process and consistency. The reforms significantly improve the extent to which the external costs of energy use are reflected in prices and increase government revenues, but, as price deregulation progresses further, more attention may need to be devoted to analysing and addressing the policies’ distributive effects. The analysis also highlights that ease of administration and collection are an important and desirable property of carbon taxes, especially in emerging market contexts.
Classification-JEL: H23; Q48; Q52
Keywords: carbon pricing, distributional effects, energy taxation, fossil-fuel subsidies, tax reform
Creation-Date: 2017-07-05
Number: 31
Handle: RePEc:oec:ctpaaa:31-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Anna Milanez
Title: Legal tax liability, legal remittance responsibility and tax incidence: Three dimensions of business taxation
Abstract: This paper examines the role of businesses in the tax system. In addition to being taxed directly, businesses act as withholding agents and remitters of tax on behalf of others. Yet the share of tax revenue that businesses remit to governments outside of direct tax liabilities is under-studied. This paper develops two measures of the contribution of businesses to the tax system and applies both these measures for 24 OECD countries. The results show that businesses play an important role in the tax system, both as taxpayers and as remitters of tax. However, care should be taken in interpreting any measure of the business tax burden, which must be understood against the backdrop of economic incidence. This paper highlights that the economic incidence, or burden, of a tax is not necessarily borne by the person on whom the tax is imposed under legal statute, but may be passed on to others in the economy, whether it be owners of capital, workers or consumers.
Creation-Date: 2017-09-18
Number: 32
Handle: RePEc:oec:ctpaaa:32-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Florens Flues
Author-Workplace-Name: OECD
Author-Name: Kurt van Dender
Author-Workplace-Name: OECD
Title: Permit allocation rules and investment incentives in emissions trading systems
Abstract: This paper argues that, in situations where choices are made between mutually exclusive investment projects and where there are economic rents, free allocation of tradable emission permits in emissions trading systems can weaken incentives for firms to invest in less carbon-intensive technologies compared to the case where permits would be auctioned. The reason is that permit allocation rules affect economic rents differentially when different product benchmarks apply to products that are close substitutes. Examples of permit allocation rules favouring more emission-intensive technologies for outputs that are close substitutes are found in the California Cap and Trade Program and in the European Union Emissions Trading System. This lack of technology-neutrality is exacerbated in the long run as future patterns of substitutability between technologies are uncertain. Free permit allocation can broaden support for carbon pricing, but this paper shows that this carries a cost in terms of environmental effectiveness if it discourages investment in low-carbon assets.
Classification-JEL: D04; D25; D47; H23; H32; L51; Q48
Keywords: average carbon prices, benchmarks, California Cap and Trade Program, carbon pricing, decarbonisation, emissions trading systems, EU ETS, permit allocation, technology neutrality
Creation-Date: 2017-11-15
Number: 33
Handle: RePEc:oec:ctpaaa:33-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Michelle Harding
Author-Name: Melanie Marten
Title: Statutory tax rates on dividends, interest and capital gains: The debt equity bias at the personal level
Abstract: This paper presents statutory tax rates on several forms of capital income, including dividends, interest on bonds and bank accounts, and capital gains on shares and real property, including integration between the corporate and personal levels. It updates the rates from an earlier tax working paper (Harding, 2013) and extends the analysis to consider the debt-equity bias of the tax system when the personal level of taxation is considered.
Keywords: Capital income taxation, Debt-equity bias
Creation-Date: 2018-02-15
Number: 34
Handle: RePEc:oec:ctpaaa:34-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Tibor Hanappi
Title: Loss carryover provisions: Measuring effects on tax symmetry and automatic stabilisation
Abstract: Loss carryover provisions are an essential part of corporate tax systems. Economic theory suggests that perfect intertemporal loss offsets are a necessary condition for the neutrality of corporate taxation across investment projects with different risk profiles. However, in practice the tax treatment of losses does often not reach this standard, e.g., due to lack of inflation indexation or tax offset restrictions. Using detailed country-level information, this paper presents two tax policy indices capturing the effects of carryover provisions on tax symmetry and stabilisation across a total of 34 OECD and non-OECD countries. The tax symmetry index captures the effectiveness of carryover provisions, including carry-forwards and carry-backs, relative to full symmetry, while the stabilisation index captures the proportion of an adverse revenue shock on loss-making firms which is absorbed by the corporate tax system. The results show that only 18 countries provide unlimited carry-forwards and most countries do not index tax losses to inflation; only 9 countries provide carry-backs while 8 countries limit the amount of tax losses which can be offset in any given year. Cross-country comparison of the two indices suggests that these restrictions have significant impacts on tax symmetry and stabilisation. Perfect tax symmetry is not achieved by the majority of the included corporate tax systems thus implying possible tax-induced distortions towards less risky projects.
Classification-JEL: G11; H21; H25
Creation-Date: 2018-02-22
Number: 35
Handle: RePEc:oec:ctpaaa:35-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Emmanuelle Modica
Author-Name: Sabine Laudage
Author-Name: Michelle Harding
Title: Domestic Revenue Mobilisation: A new database on tax levels and structures in 80 countries
Abstract: Domestic resource mobilisation is critical to fund government services and to support development. Taxes are a critical domestic revenue source that can also impact other social or economic outcomes. Understanding differences in the level and structure of tax revenues is therefore foundational to discussions of domestic resource mobilisation and of tax reform.This paper presents evidence on the level and structure of tax revenues in 80 countries, drawing on the new Global Revenue Statistics Database. It compares tax-to-GDP ratios and tax structures across countries, regions and over time. Links between tax-to-GDP ratios, GDP per capita and tax structures are assessed in a correlation analysis. The new database provides invaluable insights for researchers and fiscal policy analysts and offers a high level of comparability and reliability.
Keywords: Addis Tax Initiative, comparable, Domestic Revenue Mobilisation, global database, revenue statistics, SDG17, tax levels, tax revenues, tax structures, tax-to-GDP ratios
Creation-Date: 2018-06-28
Number: 36
Handle: RePEc:oec:ctpaaa:36-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Emmanuelle Modica
Author-Name: Sabine Laudage
Author-Name: Michelle Harding
Title: Mobilisation des ressources intérieures : Une nouvelle base de données sur le niveau d’imposition et la structure fiscale de 80 pays
Abstract: La mobilisation des ressources intérieures est un enjeu capital pour le financement des services publics et le développement. Les impôts constituent une ressource intérieure importante ayant des retombées sur les résultats économiques et sociaux. Une bonne connaissance des différences de niveau d’imposition et de structure fiscale forme la base de discussions sur la mobilisation des ressources intérieures et les réformes fiscales.Ce document présente une analyse du niveau d’imposition et de la structure fiscale de 80 pays ainsi qu’une analyse sur les liens entre ratios impôts/PIB, PIB par habitant et structure fiscale, établie sur la base de données mondiale des Statistiques des recettes publiques. Il compare ces indicateurs entre les pays et régions et examine leur évolution dans le temps. La nouvelle base de données constitue une source d’information inestimable pour les chercheurs et les spécialistes des politiques budgétaires et offre un haut niveau de comparabilité et de fiabilité.
Keywords: base de données mondiale, comparable, Initiative fiscale d’Addis-Abeba, mobilisation des ressources intérieures, niveau d’imposition, ODD17, ratios impôts/PIB, recettes fiscales, statistiques des recettes publiques, structure fiscale
Creation-Date: 2018-06-28
Number: 36
Handle: RePEc:oec:ctpaaa:36-FR
Template-type: ReDIF-Paper 1.0
Author-Name: Luisa Dressler
Author-Name: Tibor Hanappi
Author-Name: Kurt van Dender
Title: Unintended technology-bias in corporate income taxation: The case of electricity generation in the low-carbon transition
Abstract: This paper shows that corporate tax provisions can lead to different effective tax rates (ETRs) if there is a capital cost-intensive and a variable cost-intensive way of producing the same output. It develops a framework for analysing sources of the difference in ETRs and adapts existing models to compare forward-looking ETRs for low-carbon and high-carbon electricity generation technologies, considering tax provisions for cost recovery in 36 countries. It finds that standard tax systems are technology neutral when investments are debt-financed because the deductibility of interest payments compensates for the fact that capital allowances are based on nominal (rather than real) capital costs. Under equity finance, ETRs are higher for investments in capital-cost-intensive technologies as the cost of equity finance is often not deductible. Since low-carbon electricity generation tends to be relatively capital-intensive, this result represents a form of unintentional misalignment of the corporate tax system with decarbonisation objectives,.
Classification-JEL: G11; H25; O14; Q48
Keywords: corporate taxation, cost structure, electricity generation, low-carbon transition, technology choice
Creation-Date: 2018-07-19
Number: 37
Handle: RePEc:oec:ctpaaa:37-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Tibor Hanappi
Title: Corporate Effective Tax Rates: Model Description and Results from 36 OECD and Non-OECD Countries
Abstract: Variations in the definition of the corporate tax base across countries can have significant impacts on tax liabilities associated with a given investment. An accurate assessment of the effects of corporate tax systems on investment thus needs to build on a consistent methodological framework covering not only statutory tax rates (STRs) but also many provisions affecting the base such as, e.g., fiscal depreciation. The new OECD model described in this paper provides such a framework; building on the theoretical model developed by Devereux and Griffith (1999, 2003) it presents forward-looking effective tax rates (ETRs) for 36 OECD and Selected Partner Economies taking into account a wide range of corporate tax provisions. Empirical results confirm that corporate tax bases vary considerably across countries and asset categories; since tax bases are typically narrower in countries with higher STRs, ETRs tend to be less dispersed across countries than STRs.
Classification-JEL: H25; H32
Keywords: corporate tax base, corporate taxation, investment decisions, tax competition
Creation-Date: 2018-07-19
Number: 38
Handle: RePEc:oec:ctpaaa:38-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Walter Hellerstein
Author-Name: Stéphane Buydens
Author-Name: Dimitra Koulouri
Title: Simplified registration and collection mechanisms for taxpayers that are not located in the jurisdiction of taxation: A review and assessment
Abstract: This paper reviews and evaluates the efficacy of simplified tax registration and collection mechanisms for securing compliance of taxpayers over which the jurisdiction with taxing rights has limited or no authority to effectively enforce a tax collection or other compliance obligation. The experience in addressing this problem has involved primarily consumption taxes, but the lessons that can be learned from it are applicable as well to other tax regimes that confront the same problem. The best available evidence at present indicates that simplified regimes can work well in practice, achieving a high level of compliance. The paper notes that the adoption of thresholds may be an appropriate solution to avoid imposing a disproportionate administrative burden on small businesses while a good communications strategy is essential to the success of a simplified regime.
Keywords: collection, compliance costs, consumption tax, cross-border, enforcement, simplified registration and compliance, tax, thresholds, VAT, VAT/GST Guidelines
Creation-Date: 2018-09-06
Number: 39
Handle: RePEc:oec:ctpaaa:39-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Pierce O’Reilly
Title: Tax policies for inclusive growth in a changing world
Abstract: This paper, Tax policies for inclusive growth in a changing world, has been prepared in support of Argentina’s G20 Presidency. While this paper is focused on taxation policy, it forms part of a broader contribution that the OECD has made in support of Argentina’s G20 presidency.Against a backdrop of increased inequality and persistently low productivity growth, this paper considers the challenges and opportunities confronting policy makers in a rapidly changing world as a result of globalisation, technological change and the changing world of work. The paper focusses on:• The impact of the tax system on the market distribution of income, by supporting employment, skills investments, and labour market formality.• How shifting tax mixes towards growth-friendly taxes can be combined with measures to improve progressivity, particularly through base-broadening and through removing inefficient and regressive tax expenditures.• Ways in which personal income taxes and social transfers can foster inclusive growth by raising the efficiency and equity of labour and capital income tax systems.• How tax policy can foster business dynamism and productivity, including through support for investment and innovation, and can raise efficiency by continuing to combat BEPS.• How tax capacity can be raised, and how tax administration can be strengthened, including through international co-operationThe paper provides tax policy advice and recommendations to support governments in their pursuit of tax and transfer policies conducive to inclusive growth, while supporting innovation and increased productivity growth; preserving the revenue-raising capacity of the tax system; and ensuring the sustainability of public spending.
Classification-JEL: H2; H24; D31
Keywords: inclusive Growth, taxation
Creation-Date: 2018-12-18
Number: 40
Handle: RePEc:oec:ctpaaa:40-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Anna Milanez
Author-Name: Barbara Bratta
Title: Taxation and the future of work: How tax systems influence choice of employment form
Abstract: Recent policy discussion has highlighted the variety of ways in which the world of work is changing. One development prevalent in some countries has been an increase certain forms of non-standard work. Is this beneficial, representing increased flexibility in the workforce, or detrimental, representing a deterioration in job quality driven by automation, globalisation and the market power of large employers? These changes also raise crucial issues for tax systems. Differences in tax treatment across employment forms may create tax arbitrage opportunities. This paper investigates the potential for such opportunities for eight countries. It models the labour income taxation, inclusive of social contributions, of standard employees and then of self-employed workers (with applicable tax rules detailed in the paper’s annex). The aim is to understand whether countries’ tax systems treat different employment forms differently, before approaching the broader question of whether differential treatment has merit when evaluated against tax design principles.
Classification-JEL: H2; H24; J2; J21; J08
Keywords: future of work, gig economy, gig work, labour tax, labour taxation, non-standard work, self-employment, tax, taxation
Creation-Date: 2019-03-21
Number: 41
Handle: RePEc:oec:ctpaaa:41-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Anna Milanez
Author-Name: Barbara Bratta
Title: Annex - Taxation and the Future of Work: How Tax Systems Influence Choice of Employment Form
Abstract: This annex details the tax treatment of standard employees and self-employed workers in eight countries: Argentina, Australia, Hungary, Italy, the Netherlands, Sweden, the United Kingdom and the United States. The accompanying paper models and discusses the labour income taxation, inclusive of social contributions, of standard employees and then of self-employed workers. The aim is to understand whether countries’ tax systems treat different employment forms differently, before approaching the broader question of whether differential treatment has merit when evaluated against tax design principles.
Classification-JEL: H2; H24; J2; J21; J08
Keywords: future of work, gig economy, gig work, labour tax, labour taxation, non-standard work, self-employment, tax, taxation
Creation-Date: 2019-03-21
Number: 42
Handle: RePEc:oec:ctpaaa:42-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Melanie Marten
Author-Name: Kurt van Dender
Title: The use of revenues from carbon pricing
Abstract: The paper collects comprehensive and detailed data on what 40 OECD and G20 economies do with the revenues from carbon taxes, emissions trading systems, and excise taxes on energy use. It notes that constraints – which can take the form of political commitments or legal earmarks – on revenue use differ between carbon taxes, emissions trading systems, and excise taxes. Constraints are less common for excise taxes, which also raise the most revenue. Carbon tax revenues are relatively often associated with environmental tax reforms, involving reductions in personal or corporate income taxes. Revenues from emissions trading systems are frequently directed towards green spending. The results may be relevant to the political economy of ambitious carbon pricing schemes in the sense that the political expedience of choices on revenue use may depend on the amount of revenue raised.
Classification-JEL: H21; H23; Q41; Q48; Q54; Q58
Keywords: carbon pricing, climate change, effective carbon rates, environmental tax reform, external costs
Creation-Date: 2019-06-05
Number: 43
Handle: RePEc:oec:ctpaaa:43-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Kurt van Dender
Title: Taxing vehicles, fuels, and road use: Opportunities for improving transport tax practice
Abstract: This paper discusses the main external costs related to road transport and the design of taxes to manage them. It provides an overview of evolving tax practice in the European Union and the United States and identifies opportunities for better alignment of transport taxes with external costs. There is considerable scope for improving transport tax practice, notably by increasing the use of taxes based on road use. Distance charges offer great promise in delivering more efficient road transport. In heavily congested areas, targeted charges are a cost-effective way of reducing congestion. Fiscal objectives provide an impetus for change as improving vehicle fuel efficiency and fleet penetration of alternative fuel vehicles erode traditional tax bases, particularly those relating to fossil fuel use. A gradual shift from an energy-based approach towards distance-based transport taxes has the potential to establish a stable tax base in the road transport sector in the long run.
Classification-JEL: H23; Q58; R4; R41; R48
Keywords: congestion, congestion charging, distance-charges, external costs, fuel taxes, pollution, road transport
Creation-Date: 2019-06-05
Number: 44
Handle: RePEc:oec:ctpaaa:44-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Seán Kennedy
Title: The potential of tax microdata for tax policy
Abstract: This paper explores one distinctive form of the ‘big data’ of economics – individual tax record microdata – and its potential for tax policy analysis. The paper draws on OECD collaborations with Slovenia and Ireland in 2018 where tax microdata was used.Most empirical economics is based on survey data. However, the current trend of low and falling response rates has placed a question mark over the future value of survey practice generally. By contrast, this paper discusses the increasing use of tax microdata in economic research and the new types of policy analysis made possible by it. In the future, best-practice tax policy analysis is likely to combine tax microdata with survey and national account data. The advantages of these combined data will be important for policymakers to understand and address future policy challenges including protecting tax revenues in an era of population ageing and supporting fairness given the changing nature of economic mobility.
Classification-JEL: C55; D31; H24
Keywords: big data, economic mobility, income distributions, income inequality, tax administration data, tax policy analysis
Creation-Date: 2019-09-09
Number: 45
Handle: RePEc:oec:ctpaaa:45-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Pierce O’Reilly
Author-Name: Kevin Parra Ramirez
Author-Name: Michael A. Stemmer
Title: Exchange of information and bank deposits in international financial centres
Abstract: This paper assesses the impact of exchange of information on foreign-owned bank deposits in international financial centres (IFCs). Based on a dataset with extended jurisdiction coverage and sample length, foreign-owned IFC deposits declined globally by 24% or USD 410 billion during the period from 2008 to 2019. The commencement of automatic exchange of information is associated on average with a statistically significant 22% reduction in IFC bank deposits held by non-IFC counterparty jurisdictions. The results show that exchange of information on request was associated with a reduction of around 10% during the early years of implementation. Robustness checks show that voluntary disclosure programmes do not drive the results. These findings highlight the effectiveness of the expansion of automatic exchange of informationand provide further evidence of the success of a comprehensive multilateral approach towards international tax transparency.
Classification-JEL: F38; G21; H26
Keywords: cross-border bank deposits, exchange of information, offshore finance, tax evasion
Creation-Date: 2019-11-28
Number: 46
Handle: RePEc:oec:ctpaaa:46-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Hannah Simon
Author-Name: Michelle Harding
Title: What drives consumption tax revenues?: Disentangling policy and macroeconomic drivers
Abstract: This paper decomposes consumption tax revenues in OECD countries into the implicit tax rate (ITR) and consumption relative to GDP, to identify how economic downturns affect consumption tax revenues. It further considers the impact of changes in VAT efficiency and VAT rates on ITRs. The analysis finds that the observed stability in consumption tax revenues results from offsetting changes in the ITRs and in consumption as a share of GDP, arising from both macroeconomic changes and intentional policy changes. During the economic crisis in 2007-2009, lasting changes in consumption patterns, notably increases in government spending and in private consumption of necessity goods, adversely affected the efficiency of VAT systems. These changes have not since been reversed, suggesting that consumption tax revenues are now less robust to economic shocks. Broadening the VAT base and narrowing the scope of reduced rates can help to stabilise consumption tax revenues during economic downturns.
Classification-JEL: H24; H29
Keywords: Consumption Taxes, Economic crisis, Implicit Tax Rates, Macroeconomic changes, Tax Revenue Stability, Tax Revenues, Value-Added Tax, VAT efficiency
Creation-Date: 2020-04-02
Number: 47
Handle: RePEc:oec:ctpaaa:47-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Florens Flues
Author-Name: Kurt van Dender
Title: Carbon pricing design: Effectiveness, efficiency and feasibility: An investment perspective
Abstract: Carbon pricing helps countries steer their economies towards and along a carbon-neutral growth path. This paper considers how the design of carbon pricing instruments affects their effectiveness, efficiency and feasibility. Design choices matter both for taxes and Emissions Trading Systems (ETSs). Considering the role of carbon price stability for clean investment, the paper shows how volatile carbon prices can cause risk-averse investors to forego clean investment that they would have undertaken with more stable prices. The paper then evaluates the effectiveness and efficiency of policy instruments to stabilise carbon prices in ETSs, which tend to produce more volatile carbon prices than taxes. The paper analyses the auction reserve price in California, the carbon price support in the UK, and the market stability reserve in the EU ETS. Considering feasibility, the paper discusses the tax (or emissions) base, how revenue use can affect support from households and firms, and administrative choices.
Classification-JEL: D04; D40; G11; H21; H23; H32; Q52; Q54
Creation-Date: 2020-06-22
Number: 48
Handle: RePEc:oec:ctpaaa:48-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Alastair Thomas
Title: Reassessing the regressivity of the VAT
Abstract: This paper reassesses the often-made conclusion that the VAT is regressive, drawing on tax microsimulation models constructed for an unprecedented 27 OECD countries. The paper first assesses the competing methodological approaches used in previous distributional studies, highlighting the distorting impact of savings patterns on cross-sectional analysis when VAT burdens are measured relative to income. As argued by IFS (2011), measuring VAT burdens relative to expenditure – thereby removing the influence of savings – is likely to provide a more meaningful picture of the distributional impact of the VAT. On this basis, the VAT is found to be either roughly proportional or slightly progressive in most of the 27 OECD countries examined. Nevertheless, results for a small number of countries highlight that broad-based VAT systems that have few reduced VAT rates or exemptions can produce a small degree of regressivity. Results also show that even a roughly proportional VAT can still have significant equity implications for the poor – potentially pushing some households into poverty. This emphasises the importance of ensuring the progressivity of the tax-benefit system as a whole in order to compensate poor households for the loss in purchasing power from paying VAT. In the broader context of the COVID-19 crisis, the findings of the paper suggest there may be scope in many countries for VAT reform to help address revenue needs, as this revenue may be generated with less significant distributional effects than previously thought. While standard VAT rates are high in many countries, OECD evidence shows that scope exists to broaden VAT bases. Nevertheless, any VAT increases, including VAT base broadening measures that impact the poor, should be accompanied by compensation measures for poorer households, such as targeted tax credits or benefit payments.
Classification-JEL: H22; H23; H24
Creation-Date: 2020-08-10
Number: 49
Handle: RePEc:oec:ctpaaa:49-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Tibor Hanappi
Author-Name: Ana Cinta González Cabral
Title: The impact of the Pillar One and Pillar Two proposals on MNE’s investment costs: An analysis using forward-looking effective tax rates
Abstract: This working paper presents the analytical framework used by the Secretariat to estimate the direct effects of the Pillar One and Pillar Two proposals on MNE’s investment costs. The analysis builds on the standard ETR framework and extends it in two important respects. First, ETRs are calculated for an investment performed by an entity belonging to an MNE group and account for the possibility that MNEs use their organisational structure to shift profits to low tax jurisdictions. Second, the model incorporates a stylised version of the tax provisions introduced under Pillar One and Pillar Two. The results, covering over 70 jurisdictions, account for differences in tax bases and rates, and are empirically calibrated to map MNE activities, i.e., the location of their profits, turnover and assets as well as the impact of the proposals. Overall, the results suggest that the Pillar One and Pillar Two proposals would lead to modest increases on global weighted ETRs. This paper feeds into the broader analysis of the investment impacts of the Pillar One and Pillar Two proposals.
Classification-JEL: H32; F21; H25
Creation-Date: 2020-10-12
Number: 50
Handle: RePEc:oec:ctpaaa:50-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Valentine Millot
Author-Name: Åsa Johansson
Author-Name: Stéphane Sorbe
Author-Name: Sébastien Turban
Title: Corporate taxation and investment of multinational firms: Evidence from firm-level data
Abstract: This paper explores the effect of corporate taxes on the investment of multinational enterprises (MNEs), and whether this effect differs across MNE groups depending on their profitability rate. Firm-level analysis conducted on a cross-country panel of MNE entities confirms the earlier finding that MNE investment in a jurisdiction is negatively affected by effective corporate tax rate increases in that jurisdiction. The analysis also suggests that the tax sensitivity of MNE investment differs across entities belonging to different MNE groups, with a U-shape relationship between tax sensitivity and MNE group profitability. Entities belonging to groups with negative profitability or relatively high profitability rates are found to be relatively less sensitive than those belonging to groups with lower but positive profitability rates. For example, the estimated tax sensitivity of firms in MNE groups with a profitability rate above 10% is found to be nearly half the sensitivity of a firm in an MNE group with a profitability rate between 0% and 10%. This has implications with regard to the tax reform proposals currently under discussion by the OECD/G20 Inclusive Framework on BEPS, as this suggests that highly profitable MNE groups, which are more likely to be impacted by the proposals, may be less sensitive to taxes in their investment behaviour than the typical MNE.
Creation-Date: 2020-10-12
Number: 51
Handle: RePEc:oec:ctpaaa:51-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Sébastien Turban
Author-Name: Stéphane Sorbe
Author-Name: Valentine Millot
Author-Name: Åsa Johansson
Title: A set of matrices to map the location of profit and economic activity of multinational enterprises
Abstract: This paper describes the methodology and data sources used to build a set of matrices mapping the location of profit and economic activity of multinational enterprises (MNEs) across jurisdictions. These matrices were originally designed for the purpose of assessing the effect of proposals for the reform of international corporate tax arrangements under consideration by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). They could also serve other analytical purposes in the future. The set consists of a profit matrix and three matrices focusing on indicators of economic activity (turnover, tangible assets and payroll). Each matrix contains data spanning more than 200 jurisdictions (matrix rows) and broken down across more than 200 jurisdictions of MNE ultimate parent (matrix columns), focusing primarily on year 2016. The matrices combine data from a range of sources in a consistent framework, including newly available aggregated Country-by-Country Report (CbCR) data, the ORBIS database, and the OECD Analytical AMNE database. Gaps in data are filled using extrapolations based on macroeconomic data, including via a sophisticated procedure to extrapolate profit based on foreign direct investment (FDI) data. Extensive benchmarking has been undertaken to ensure consistency across the data sources and extrapolations used in the matrices.
Creation-Date: 2020-12-08
Number: 52
Handle: RePEc:oec:ctpaaa:52-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Alastair Thomas
Author-Workplace-Name: OECD
Title: Reforming the taxation of housing in Israel
Abstract: This paper examines the taxation of housing in Israel, and proposes a set of reforms to improve the efficiency and fairness of the current system. Israel’s housing tax system faces similar problems to those of many other OECD countries. In particular, a bias arises in favour of owner-occupied property relative to rented property due to the non-taxation of imputed rents and most capital gains. That said, unlike many OECD countries, Israel taxes some owner-occupied capital gains (above a generous threshold) and generally does not allow mortgage interest relief for owner-occupied properties, reducing the extent of the distortion more than in many countries. As with most OECD countries, Israel levies highly distortionary transaction taxes, although a zero-rate band significantly limits the number of owner-occupied house purchases subject to the tax. Additionally, Israel’s recurrent property tax (the Arnona) faces a number of design problems, while the tax rules for rental income are complex and subject to significant tax evasion. To address these concerns, a reform package is proposed that involves a gradual and broadly revenue-neutral shift away from transaction taxes towards recurrent taxation of residential property, via increases in both the recurrent property tax and rental income taxation. The redesign of the recurrent property tax from an area-based to a market value-based tax is also proposed, as are a number of more technical reforms.
Creation-Date: 2021-07-16
Number: 53
Handle: RePEc:oec:ctpaaa:53-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Ana Cinta González Cabral
Author-Name: Silvia Appelt
Author-Name: Tibor Hanappi
Title: Corporate effective tax rates for R&D: The case of expenditure-based R&D tax incentives
Abstract: R&D tax incentives have become a widely used policy tool to promote business R&D. How do they shape firms’ incentives to invest in R&D? This paper contributes a methodology to construct forward-looking effective tax rates for an R&D investment that reflect the value of expenditure-based R&D tax incentives. The new OECD estimates cover 48 countries and consider the case of large profitable firms, accounting for the bulk of R&D in most economies. The results provide new insights into the generosity of R&D tax incentives from the perspective of firms that decide on whether or where to invest in R&D (extensive margin) and the level (intensive margin) of R&D investment. The generosity of the favourable tax treatment of R&D is shown to vary at the intensive and extensive margins, highlighting differences in countries’ strategies to support R&D through the tax system.
Classification-JEL: H25; H2; O3; H
Creation-Date: 2021-07-29
Number: 54
Handle: RePEc:oec:ctpaaa:54-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Jonas Teusch
Author-Name: Samuel Ribansky
Title: Greening international aviation post COVID-19: What role for kerosene taxes?
Abstract: This paper discusses the contribution that kerosene taxes could make to decarbonising international air travel post COVID-19. Reaching climate neutrality by mid-century requires that all sectors, including aviation, cut emissions strongly. The paper argues that clarity on decarbonisation targets, including through carbon price signals in the form of kerosene taxes, will support an orderly transition in aviation. A gradually increasing tax on kerosene can strengthen the incentives for investment and innovation in clean aviation technologies. Taxing kerosene would also provide implementing countries with tax revenues that could be used to support clean investment and innovation, while addressing competitiveness and equity issues. Where legal obstacles to taxing kerosene exist, these can be overcome by renegotiating the relevant air service agreements.
Classification-JEL: H23; L93; Q58; R48
Keywords: Air transportation, Carbon taxes, Environmental externalities, Environmental taxes, Fuel taxes, Greenhouse gas emissions, Policy instruments
Creation-Date: 2021-10-20
Number: 55
Handle: RePEc:oec:ctpaaa:55-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Bethany Millar-Powell
Author-Name: Bert Brys
Author-Name: Pierce O’Reilly
Author-Name: Yannic Rehm
Author-Name: Alastair Thomas
Title: Measuring effective taxation of housing: Building the foundations for policy reform
Abstract: This paper measures the effective taxation of housing investments in 40 OECD member and partner countries. The paper derives both Marginal Effective Tax Rates (METRs) and Average Effective Tax Rates (AETRs), which incorporate the stream of income and taxes over the life of the housing investment. The methodology is applied to owner-occupied and rented residential property for investments that are financed with debt or equity. The paper finds that the level and components of housing taxation depend greatly on the investment scenario. Effective tax rates vary substantially depending on the holding period, rate of return, tenure (owner-occupied or rented), financing scenario, and the inflation rate. Effective tax rates do not vary much with the taxpayer’s income and wealth or with the rate of return. The paper finds there is scope to reduce the tax differential between different investment scenarios and strengthen progressivity and horizontal equity.
Classification-JEL: H2
Creation-Date: 2022-01-12
Number: 56
Handle: RePEc:oec:ctpaaa:56-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Michelle Harding
Author-Name: Dominique Paturot
Author-Name: Hannah Simon
Title: Taxation of part-time work in the OECD
Abstract: The share of part-time employment in total employment has risen in most OECD countries over the past decades. While this is often associated with increased female labour force participation and the desire of many workers to achieve an improved work-life balance, there has been a significant decline in the average earnings of part-time workers relative to full-time workers, as well as an increase in involuntary part-time employment in a number of countries. This paper presents a summary of the taxation of part-time work in OECD countries. It includes new calculations of the effective tax rates on part-time work including those for male and female part-time workers and for different household types. These indicators provide an evidence base for policymakers looking to understand the impact of the tax system on the choice of employment form. The analysis shows that average tax rates for part-time workers are lower than those applied to full-time workers in almost all OECD countries, reducing post-tax gender wage gaps, although marginal tax rates are often higher for part-time workers. These differences between the taxation of part-time and full-time workers are largely due to differences in earnings levels, and therefore to the progressivity of countries’ tax systems, rather than to differences in the tax treatment applied to part-time workers relative to full-time workers.
Creation-Date: 2022-03-14
Number: 57
Handle: RePEc:oec:ctpaaa:57-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Alessandra Celani
Author-Name: Luisa Dressler
Author-Name: Tibor Hanappi
Title: Assessing tax relief from targeted investment tax incentives through corporate effective tax rates: Methodology and initial findings for seven Sub-Saharan African countries
Abstract: Corporate tax incentives reduce investment costs for businesses, which may affect investment and location decisions. They apply through different designs and interact with countries’ standard tax systems, often making it difficult for tax policy makers and researchers to compare their generosity and assess their impacts across countries. This paper develops a methodology to calculate forward-looking corporate effective tax rates (ETRs) summarising tax relief from investment tax incentives into comparable indicators. It presents ETR indicators for seven Sub-Saharan African countries. Empirical results show that tax incentives substantially lower corporate taxation across these countries. On average, tax incentives reduce ETRs by 30% in the food and automotive industries compared to the standard tax treatment. ETRs often differ among taxpayers in a same sector and country - by up to 55%. The most generous tax treatment is typically offered within Special Economic Zones, where tax incentives can reduce ETRs to near zero.
Classification-JEL: H25; H32; O14; F21
Keywords: Corporate taxation, Effective tax rates, FDI, Sub-Saharan Africa, Tax incentives
Creation-Date: 2022-09-22
Number: 58
Handle: RePEc:oec:ctpaaa:58-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Mariona Mas-Montserrat
Author-Name: Céline Colin
Author-Name: Eugénie Ribault
Author-Name: Bert Brys
Title: The design of presumptive tax regimes
Abstract: Presumptive tax regimes, also known as simplified tax regimes, simplify the tax compliance process for micro and small businesses. By reducing tax compliance costs and levying lower tax rates compared to the standard tax system, these regimes aim at encouraging business formalisation and compliance. They are particularly useful in situations where actual taxable income is difficult to quantify as a taxpayer’s tax base is determined using alternative indicators. Although these regimes exist in many tax systems, they vary greatly in their design. This OECD working paper provides an analytical framework for characterising and comparing these regimes. It also highlights key design aspects that deserve further consideration and lists a series of best practices on the design and administration of these regimes.
Classification-JEL: H25
Keywords: micro and small business taxation, presumptive tax regimes, simplified tax regimes, tax policy design
Creation-Date: 2023-02-14
Number: 59
Handle: RePEc:oec:ctpaaa:59-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Mariona Mas-Montserrat
Author-Name: Céline Colin
Author-Name: Eugénie Ribault
Author-Name: Bert Brys
Title: La conception des régimes d’imposition forfaitaire
Abstract: Les régimes d’imposition forfaitaire, aussi appelés régimes simplifiés d’imposition, simplifient le processus de mise en conformité fiscale pour les micro et petites entreprises. En réduisant les coûts de mise en conformité fiscale et en offrant des taux d’imposition inférieurs à ceux du régime réel d’imposition, ces régimes visent à encourager la formalisation et la conformité fiscale des entreprises. Ils sont particulièrement utiles dans les situations où le revenu imposable réel est difficile à quantifier et déterminent l'assiette fiscale à l'aide d'indicateurs alternatifs. Bien que ces régimes existent dans de nombreux systèmes fiscaux, leur conception varie considérablement. Ce document de travail de l'OCDE présente un cadre d’analyse qui permet de caractériser et comparer ces régimes. Il met également en lumière les principaux aspects de la conception qui méritent un examen plus approfondi et énumère une série de bonnes pratiques pour la conception et l’administration de ces régimes.
Classification-JEL: H25
Creation-Date: 2023-02-14
Number: 59
Handle: RePEc:oec:ctpaaa:59-FR
Template-type: ReDIF-Paper 1.0
Author-Name: Ana Cinta González Cabral
Author-Name: Pierce O’Reilly
Author-Name: Silvia Appelt
Author-Name: Fernando Galindo-Rueda
Author-Name: Tibor Hanappi
Title: Design features of income-based tax incentives for R&D and innovation
Abstract: Tax incentives that provide preferential tax treatment to the incomes arising from research and development (R&D) and innovation activities, such as intellectual property regimes, have become widespread in recent years. This paper describes the key design features of tax incentives available in 49 member countries of the Inclusive Framework on BEPS (IF), covering all OECD countries and EU countries. It outlines differences in the design of such incentives that may translate into differences in the tax benefits offered. The information collected and reported in this paper is a first step towards a more systematic comparison of tax support policies for R&D and Innovation.
Creation-Date: 2023-04-20
Number: 60
Handle: RePEc:oec:ctpaaa:60-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Grégoire Garsous
Author-Name: Mark Mateo
Author-Name: Jonas Teusch
Author-Name: Konstantinos Theodoropoulos
Author-Name: Astrid Tricaud
Author-Name: Kurt van Dender
Title: Net effective carbon rates
Abstract: Building on an approach pioneered in the OECD’s Taxing Energy Use for Sustainable Development report, this paper develops a methodology to estimate effective carbon rates net of pre-tax fossil fuel support: the Net Effective Carbon Rates (Net ECR). This exercise is made possible by combining the two OECD databases: the Taxing Energy Use and Effective Carbon Rates database (the backbone of the newly established OECD series on Carbon Pricing and Energy Taxation) and the Inventory of Support Measures for Fossil Fuels. The paper then explores potential use cases of this new indicator. In particular, it explains how the Net ECR can be used to calculate fossil fuel support (FFS) against external carbon pricing benchmarks and why such an approach facilitates comparisons of FFS across countries and over time. The paper’s conclusions include avenues for future research.
Classification-JEL: H23; Q41; Q54; Q48
Creation-Date: 2023-05-25
Number: 61
Handle: RePEc:oec:ctpaaa:61-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Ana Cinta González Cabral
Author-Name: Silvia Appelt
Author-Name: Tibor Hanappi
Author-Name: Fernando Galindo-Rueda
Author-Name: Pierce O’Reilly
Author-Name: Massimo Bucci
Title: A time series perspective on income-based tax support for R&D and innovation
Abstract: The use of tax incentives that provide preferential tax treatment to the incomes arising from research and development (R&D) and innovation activities, such as intellectual property regimes, has accelerated over the last two decades. The globalisation of R&D together with the greater mobility of intangible income may have contributed to the rise in such incentives to attract and retain R&D and innovation activity while preventing the transfer of taxable base to other countries. This paper documents the changes to the availability and design of income-based tax incentives from 2000 onwards for 48 countries, including all OECD countries and EU countries. Building on this, the paper analyses trends in the generosity of income-based tax support over time by building indicators of effective tax rates that can provide insights into the impact of Action 5 of the OECD/G20 Base Erosion and Profit Shifting project.
Classification-JEL: E22; H25; O34; O38
Creation-Date: 2023-07-27
Number: 62
Handle: RePEc:oec:ctpaaa:62-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Ana Cinta González Cabral
Author-Name: Tibor Hanappi
Author-Name: Silvia Appelt
Author-Name: Fernando Galindo-Rueda
Author-Name: Pierce O’Reilly
Title: Effective tax rates for R&D intangibles
Abstract: Tax incentives such as intellectual property regimes provide for reduced taxation of the income derived from research, development, and innovation related activities. By doing so, they lower the overall tax burden from investing in certain qualified intangible assets. This paper proposes a methodology to build indicators comparing the effect of income-based tax incentives for R&D and innovation on firms’ incentives to make R&D intangible investments. It provides insights into how such incentives affect firms’ decisions on whether, where and how much to invest in R&D intangibles. These indicators are used to illustrate the extent to which these tax incentives may create potential distortions to firms’ investment, protection and commercialisation decisions. The model is further developed to account for the design changes to such tax incentives introduced by the OECD/G20 Base Erosion and Profit Shifting minimum standard.
Classification-JEL: H25; O34; O38; E22
Creation-Date: 2023-07-27
Number: 63
Handle: RePEc:oec:ctpaaa:63-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Tibor Hanappi
Author-Name: David Whyman
Title: Tax and Investment by Multinational Enterprises
Abstract: This paper investigates two closely related questions concerning the responses of Multi-National Enterprise (MNE) investment to corporate income taxation using a panel of unconsolidated subsidiary-level and consolidated group-level data from the ORBIS database. First, the paper provides new evidence on the heterogeneity of investment responses to taxation across multinational firms. This paper finds that profit shifting opportunities, access to credit, and market power at the group level are associated with decreased investment sensitivity to taxation among MNE subsidiaries. Second, a new empirical approach is used to investigate how tax changes at the host jurisdiction level affect investment at the MNE group level and whether there are propagation effects to foreign subsidiaries within the same MNE group. This paper finds that taxation in one jurisdiction in which an MNE is active is positively associated with investment in its subsidiaries in other jurisdictions. This finding suggests that the well-document negative relationship between taxation and MNE investment within a host jurisdiction masks the MNE rebalancing the location of its investment to other host jurisdictions in response to changes in cross-jurisdictional tax rate differentials rather than purely decreasing its investment globally.
Classification-JEL: F21; H32; H25
Keywords: investment, Multinational Enterprises, Taxation
Creation-Date: 2023-07-27
Number: 64
Handle: RePEc:oec:ctpaaa:64-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Diana Hourani
Author-Name: Bethany Millar-Powell
Author-Name: Sarah Perret
Author-Name: Antonia Ramm
Title: The taxation of labour vs. capital income: A focus on high earners
Abstract: This working paper presents novel analysis comparing in a consistent way the tax treatment of labour and capital income across OECD countries, through stylised effective tax rates (ETRs). It shows that dividend income and capital gains are generally subject to lower ETRs than wage income at the personal level. In many countries, capital income is also tax-favoured even when considering taxes paid by both firms and individuals, although the gap between labour and capital income taxation tends to be smaller than when considering only personal-level taxes. The gap between ETRs on labour and capital income varies between countries and grows with income levels in some. The paper highlights that differential tax treatment of labour and capital income can affect the efficiency and equity of tax systems.
Classification-JEL: H2
Keywords: capital, high earners, inequality, labour, progressivity
Creation-Date: 2023-08-28
Number: 65
Handle: RePEc:oec:ctpaaa:65-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Pierce O’Reilly
Author-Name: Tibor Hanappi
Author-Name: Samuel Delpeuch
Author-Name: Felix Hugger
Author-Name: David Whyman
Title: Update to the economic impact assessment of pillar one: OECD/G20 Base Erosion and Profit Shifting Project
Abstract: This paper presents an update to the Economic Impact Assessment of Amount A of Pillar One of the Two Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. The revised assessment is based on Amount A as detailed in the text of the Multilateral Convention to Implement Amount A of Pillar One. With results extending from 2017 to 2021, the paper details the changes in the design of Amount A as well as updates to the data and methodology of the impact assessment. The paper outlines the impact of Amount A on the allocation of taxing rights and the resulting revenue impacts.
Classification-JEL: H; F
Creation-Date: 2023-10-11
Number: 66
Handle: RePEc:oec:ctpaaa:66-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Felix Hugger
Author-Name: Ana Cinta González Cabral
Author-Name: Pierce O’Reilly
Title: Effective tax rates of MNEs: New evidence on global low-taxed profit
Abstract: The effective taxation of corporate profits is at the centre of an active public and academic debate. This debate is often focused on the extent of low-taxed profit of multinational enterprises (MNEs) in jurisdictions with low statutory tax rates or low average effective tax rates (ETRs). However, some affiliates in high tax jurisdictions may also be subject to low ETRs, due to tax incentives or other provisions. To date, a global accounting of the ETRs paid by MNEs that incorporates within-country heterogeneity has been missing. Using a new dataset on the global activities of large MNEs, this paper provides new estimates of the distribution of effective tax rates of large MNEs across and within jurisdictions. The results show that low tax profit is common, and that substantial low-taxed profit exists outside low tax jurisdictions. We estimate that high tax jurisdictions (jurisdictions with average ETRs of above 15%) account for more than half (53.2%) of global profits taxed below 15%, much more than very low tax jurisdictions (those with average ETRs below 5%) which only account for 18.7% of low-taxed profits. This suggests that an assessment of global low-taxed profit that focuses only on jurisdictions with low average ETRs could potentially miss out on more than half of global low-taxed profit.
Classification-JEL: H; F
Creation-Date: 2023-11-21
Number: 67
Handle: RePEc:oec:ctpaaa:67-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Felix Hugger
Author-Name: Ana Cinta González Cabral
Author-Name: Massimo Bucci
Author-Name: Maria Gesualdo
Author-Name: Pierce O’Reilly
Title: The Global Minimum Tax and the taxation of MNE profit
Abstract: The paper assesses the impact of the global minimum tax (GMT) on the taxation of multinational enterprises (MNEs), based on a comprehensive dataset capturing the global activities of large MNEs. It has four key findings. First, the GMT substantially reduces the incentives to shift profits. Second, the GMT is estimated to very substantially reduce low-taxed profit worldwide through lower profit shifting and top-up taxation. Third, the GMT is estimated to increase CIT revenues. Finally, the GMT is estimated to reduce tax rate differentials across jurisdictions with potential impacts on the allocation of investment and MNE activity.
Classification-JEL: F23; H26; H25
Creation-Date: 2024-01-09
Number: 68
Handle: RePEc:oec:ctpaaa:68-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Mariona Mas-Montserrat
Author-Name: Céline Colin
Author-Name: Bert Brys
Title: The design of presumptive tax regimes in selected countries
Abstract: Presumptive tax regimes (also known as simplified tax regimes) intend to reduce tax compliance costs for micro and small businesses (and enforcement costs for the tax administration) while levying a lower tax burden as compared to the standard tax system. This working paper compiles detailed information on the presumptive tax regimes existing in a selection of OECD and non-OECD countries, identifies common practices adopted across the countries examined and provides multiple examples of best practices observed in these regimes. These examples can serve as guidance to policy makers and tax administrations to strengthen particular features of the presumptive tax regimes implemented in their jurisdictions. Lastly, the paper highlights the main challenges generally observed in the presumptive tax regimes under study, which might undermine the role of these regimes in incentivising business formalisation and strengthening tax compliance over time. The countries covered are Argentina, Brazil, Colombia, Costa Rica, France, Hungary, Italy, Mexico, South Africa, Tunisia and Uruguay.
Classification-JEL: H25
Keywords: micro and small business taxation, presumptive tax regimes, simplified tax regimes, tax policy design
Creation-Date: 2024-03-19
Number: 69
Handle: RePEc:oec:ctpaaa:69-EN
Template-type: ReDIF-Paper 1.0
Author-Name: Tom Zawisza
Author-Name: Sarah Perret
Author-Name: Pierce O’Reilly
Author-Name: Antonia Ramm
Title: Tax arbitrage through closely held businesses: Implications for OECD tax systems
Abstract: This paper explores tax arbitrage incentives and behaviours in OECD countries, and their implications for tax systems more broadly. It focuses on how OECD tax systems might encourage business owners, in particular owners of unincorporated businesses and owner-managers of closely held incorporated businesses, to minimise their tax burdens through tax arbitrage. The paper finds that tax incentives to incorporate and earn capital income through corporations have increased in the last two decades. It shows that there has been an increase in incorporated businesses in many OECD countries, which has been partly driven by tax factors. The paper also finds that, in many countries, a combination of tax system features – related to corporate, dividend, capital gains, gift and inheritance taxation – provide particularly strong incentives to retain earnings inside corporations.
Creation-Date: 2024-10-07
Number: 70
Handle: RePEc:oec:ctpaaa:70-EN