publication . Preprint . 2015

Tax havens under international pressure: How do they react?

Patrice Pieretti; Giuseppe Pulina;
Open Access
  • Published: 01 Jan 2015
This paper contributes to the literature about tax havens by providing a more comprehensive analysis of their role. The aim is to analyze how low-tax jurisdictions can react to growing international pressure exerted, by high-tax countries, to enforce compliance with anti aggressive tax planning standards. To this end, we model how a small tax haven tries to be attractive to multinationals located in a high-tax region by providing aggressive tax planning services and/or a favorable environment for local activities. The model demonstrates that under realistic conditions it is optimal to stigma- tize a non-compliant low-tax jurisdiction, even if its reputation for ...
free text keywords: Aggressive tax planning, Tax havens, Multinational _rms, Value driven FDIs, Political pressure, jel:F21, jel:F23, jel:H23, jel:H25, jel:H26

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