Working Paper: NBER ID: w31830
Authors: Marius Brülhart; Marko Koethenbuerger; Matthias Krapf; Raphael Parchet; Kurt Schmidheiny; David Staubli
Abstract: Switzerland could be considered as a test case for international corporate-tax policy coordination. It is a federation of 26 fiscally autonomous cantons that have been taxing corporate profits more or less independently for over a century. We document and discuss corporate taxation in Switzerland, with a focus on three aspects: (a) the evolving within-country geography of taxable profits and corporate tax rates, (b) the nature and historical emergence of formal tax-base harmonization, and (c) the functioning of fiscal equalization. Parallels are drawn and differences are discussed relative to ongoing efforts at international tax coordination.
Keywords: corporate taxation; Switzerland; tax competition; tax harmonization; fiscal federalism
JEL Codes: H25; H71; H77
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mobility of taxable profits (F20) | supranational coordination of corporate taxation (F38) |
| tax competition (H26) | efficiency losses (D61) |
| supranational coordination of corporate taxation (F38) | efficiency losses (D61) |
| profit sheltering in low or zero-tax jurisdictions (H26) | revenue losses for corporate host-country governments (F64) |
| eliminating tax-motivated profit shifting (H26) | increase in corporate tax base (H32) |
| formal tax base harmonization in Switzerland (F38) | insights for international coordination efforts (F42) |