One of very few field experiments in tax compliance, this study generates a unique data set on Swiss taxpayers' underdeclaration of income and wealth and overdeduction of tax credits by obtaining exclusive access to tax-return corrections made by the tax administration. Using this commune-level...

Mental accounting practices of self-employed taxpayers are investigated in two studies. Interviews (N=30) revealed that perceptions of the tax due differ widely. While a majority mentally segregate the tax component from their net income, others claim ownership of the gross income as a whole and...

Some noncompliant taxpayers fall outside the reach of third-party withholding and reporting. Revenue agencies may use enforcement and/or prosocial strategies to encourage compliance among such taxpayers. Revenue agencies should stand ready to use narrative as part of these efforts, despite...

Standard models of taxpayer compliance have fallen short of predicting the degree of honesty found in the data. We contribute to the more recent literature assessing cultural factors in the decision to underreport. We find that there are two forms of possible misspecification in the current...

Country-level factors affect tax compliance, so studies based on cross-country data are crucial for understanding the behavior of tax compliance. This study adopts the first differenced approach to estimating the determinants of tax compliance based on the index of tax compliance for 58...

We investigate competition for FDI within a region when a foreign multinational firm can profitably exploit differences in statutory corporate tax rates by shifting taxable profits to lower-tax jurisdictions. In such a framework we show that targeted tax competition may lead to higher welfare...

Full movement from the destination principle to the origin principle would lead to changes in VAT revenues in EU countries. Hence a clearing mechanism is necessary to rectify such imbalances. To estimate the relevance of VAT evasion this study quantifies the annual amounts of hypothetical VAT...

Using instruments like information technology and paid preparation of tax returns, private taxpayers have a set of strategies to optimize their compliance cost burden. Assuming rational behavior, private businesses can be expected to choose a cost-optimal administration strategy. Nevertheless,...

This paper studies the design of indirect redistributive taxation and of corrective taxation in the presence of status goods, allowing for the possibility that illegal copies of those goods may be purchased on black markets (the phenomenon of piracy). Heavy taxation of status goods, despite the...

This paper examines the effect of an increase in the tax rate on tax evasion in a model where taxpayers report their incomes and pay the taxes first, and the penalties are imposed later if evasion is caught. When the penalty is imposed on the undeclared income, an increase in the tax rate leads...