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Tax Competition and Tax Co-operation in the EU: The Case of Savings Taxation

Author

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  • Katharina Holzinger
Abstract
It took the EU 35 years to achieve a co-operative agreement on co-ordinated measures of savings taxation in a world with mobile capital. Political science has offered two explanations for this co-operation problem. First, co-operation is difficult as a result of the heterogeneity of governments' interests. Countries with a small domestic tax base favour tax competition, while countries with a large tax base prefer tax co-operation. Second, co-operation is difficult as a consequence of specific characteristics of the collective action problem involved. The actors face a prisoners' dilemma. Both explanations have their limits. The first approach is not very good in predicting actual policy preferences of governments, and the second approach dismisses the fact that the EU offers co-operative institutions that should be able to resolve a dilemma. The paper proposes a model which refines these explanations and fits better the positions of EU governments and their problems of finding an agreement.

Suggested Citation

  • Katharina Holzinger, 2003. "Tax Competition and Tax Co-operation in the EU: The Case of Savings Taxation," EUI-RSCAS Working Papers 7, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    • Handle: RePEc:erp:euirsc:p0076
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    References listed on IDEAS

    as
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    Cited by:

    1. Oeffner, Marc, 2005. "Die Duale Einkommensteuer des Sachverständigenrates in der Diskussion," W.E.P. - Würzburg Economic Papers 59, University of Würzburg, Department of Economics.
    2. McCahery, J.A. & Vermeulen, E.P.M., 2004. "The changing landscape of EU company law," Discussion Paper 2004, Tilburg University, Tilburg Law and Economic Center.
    3. Lukas Hakelberg, 2014. "The Power Politics of International Tax Cooperation. Why Luxembourg and Austria accepted automatic exchange of information on foreign account holders’ interest income," EUI-RSCAS Working Papers p0375, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    4. McCahery, J.A. & Vermeulen, E.P.M., 2005. "Does the European company prevent the 'Delaware-effect'?," Discussion Paper 2005, Tilburg University, Tilburg Law and Economic Center.

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    Keywords

    game theory; regulatory competition; tax policy; harmonisation; policy coordination; positive integration; financial markets; directives;
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