A political compromise left defects to the initial design of a value-added tax introduced to Japan in 1989. This paper assesses the efficiency consequence of that political decision. We estimate revenue drains arising from tax-motivated divestures to infer maximum possible efficiency losses from...

It is common to defi ne benefi t eligibility for small business policies by restrictions on the fi rm size. This paper investigates the incentives for a large fi rm to masquerade as many small fi rms by separately incorporating business segments, focusing on the case of the Japanese value-added...

This paper reviews and evaluates corporate tax policy under the 1997–2010 Labour government. During this period the government implemented a classical rate-cut-cum-base-broadening tax policy for large companies. Tax policy for small and medium-sized enterprises (SMEs) is more difficult to...

This paper considers behavioural responses of companies´ declared profits to changes in profit tax rates. Using microsimulation modelling based on the UK corporate tax system, it argues that the cyclical volatility of firms´ gross profits and off-setting deductions are potentially important...

This paper examines if firms shift income out of years with high corporate tax rates into years when tax cuts are anticipated. Such intertemporal shifting can be one explanation for the stability of corporate tax revenues in Central and Eastern Europe, despite the major decline in the corporate...

The initial cost of capital of a foreign subsidiary, financed by its parent from abroad, is dependent on repatriation taxes and this also applies to all follow-up investments financed from marginal foreign profits, representing the required return on the initial investment. Only investments...

The paper estimates the impact that the differences of taxation in the Spanish Personal Income Tax (IRPF) and Corporate Income Tax (IS) cause in the division of the economic activity between corporate and noncorporate firms. The exercise is based on the approach proposed by Mackie-Mason and...

This paper analyses the impact of the corporate tax reform introduced in Italy in early 2004 on firms’ tax burden with respect to 2001 tax legislation. For this purpose we build a microsimulation model reproducing in detail the Italian corporate tax system under the two regimes. The model is...

A stylised model is provided to show how the direct effect of corporate income tax on wages can be identified in a bargaining framework using cross-company variation in tax liabilities, conditional on value added per employee. Using data on 55,082 companies located in nine European countries...

Because policymakers may consider the state of the economy when setting taxes, endogeneity bias can arise in regression models that estimate relationships between economic variables and taxes. This paper quantifies the policy endogeneity bias and estimates the impact of R&D tax incentives on R&D...