Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271962 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10318
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The OECD's proposal for a global minimum tax (GMT) of 15% aims for a reversal of a decline of corporate tax rates. We study the revenue effects of the GMT by focusing on strategic tax setting effects. The direct effect from less profit shifting increases revenues in high-tax countries. A secondary effect, however, is that the value of attracting foreign investments increases, which intensifies tax competition. We show that when governments compete via firm-specific or uniform subsidies, the revenue gains from less profit shifting are exactly offset by higher subsidies. When competition is by tax rates, revenues may increase however.
Subjects: 
global minimum tax
tax competition
OECD BEPS
Pillar II
JEL: 
F23
F55
H25
H73
Document Type: 
Working Paper
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