Oxford Business Tax Blog

Public Country-by-Country Reporting in Europe and Beyond

Nicolas Traut (Oxford University Centre for Business Taxation), 29 November 2024

A recent EU directive introduces rules for public country-by-country reporting at the EU level. This is hailed by the EU as a win for tax transparency and fairness. Since the measure has an impact that goes well beyond the EU, the implications of the directive are relevant at a more global level. In this blog, the author outlines obligations of businesses under the EU public country-by-country reporting and offers some policy observations.

Global Spillovers of Carbon Taxes: How Emissions 'Leak' to Developing Countries

Business tax paper of the month - November 2024

Diego Känzig (Northwestern University), Julian Marenz (London Business School) & Marcel Olbert (London Business School), 21 November 2024

Carbon taxes are widely considered the best policy instrument for ensuring an economically efficient transition to green technologies and many countries have adopted them. However, the case for carbon taxes becomes weaker if emissions tend to ‘leak’ from the countries that impose carbon taxes to those that do not. This blog summarizes recent research on carbon leakage within multinational firms. It shows that when European countries impose carbon taxes, exposed firms increase emissions in their subsidiaries on the African continent.

Will Workers Pay The Employer National Insurance Contributions Rise?

Ander Iraizoz (Oxford University Centre for Business Taxation), 31 October 2024

The Chancelor announced an increase in employers’ National Insurance Contributions in the Budget on October 30th. Drawing on recent research on tax incidence, this blog discusses whether the cost is likely to be shifted to workers through a drop in wages.

Check-the-Box and Corporate Tax Policy

Nicolas Traut (Oxford University Centre for Business Taxation), 9 October 2024

Germany recently introduced entity classification election rules that allow certain pass-through entities to elect to be taxed under the corporate tax regime. The new rules are reminiscent of the controversial US “check-the-box” regulations. In this blog and in a recent article, the author examines the German rules in the context of neutrality of legal form and robustness to tax avoidance and draws general conclusions for “check-the-box” as a policy tool.

The Impact of the Minimum Wage on Independent Businesses

Business tax paper of the month - September 2024

Max Risch (Carnegie Mellon University),  25 September 2024

Proposals to raise the minimum wage are often met with concerns about adverse financial effects for small, independent firms and worsened employment prospects for low-skilled workers. In this blog, the authors describe a recent study of minimum wage increases in the United States. The findings suggest that independent businesses are largely able to accommodate minimum wage increases with increased revenues from sales. Vulnerable workers are no less likely to be employed and earn significantly more.

Another take on the (bad) Apple Ruling: is a misapplication of domestic law enough for a finding of State Aid?

Stephen Daly, 17 September 2024

In this blog, Stephen Daly (King’s College London) comments on the ECJ’s recent decision in the Apple case, in particular its finding that a misapplication of domestic law amounts to State aid. Stephen argues that the Apple decision creates legal uncertainty because it appears to be inconsistent with the ECJ’s earlier decision in Engie on this point. But if Apple is followed it would mean that tax authorities will have to look over their shoulders as the Commission might find a reasonable and bona fide interpretation of domestic law unlawful.

A Bad Apple Ruling

Richard Collier, 13 September 2024  

A recent ruling at the European Court of Justice holds that Apple is liable to pay £11 billion to Ireland as the tax treatment of Apple’s two Irish branches is found to be in violation of the European Union’s state aid rules. In this blog, Richard Collier analyses the case and concludes that the ECJ’s ruling relies on a misguided analysis of the taxation of branches under international tax principles.

An Excess Profits Tax 

Michael P. Devereux, 19 July 2024

The incoming Labour government intends to publish a Roadmap for Business Taxation for the next parliament. In this blog and in a recent paper, Michael Devereux discusses the possibility of introducing a new tax on excess profit earned by businesses that sell in the UK. The tax would be less distortive than existing taxes on business income and may therefore represent a way to raise revenue that is consistent with the government objective of new economic growth.

Tax Audits: Long-run Impacts on Intentional and Unintentional Non-Compliance

Business tax paper of the month - July 2024

Tobias Christiansen (University of Copenhagen), 17 July 2024

Tax audits are a key tool to secure a high level of tax compliance. In this blog and in a recent paper, the author shows that the impact of audits varies significantly with taxpayers’ intentions to comply. Audits raise future compliance significantly among taxpayers who inadvertently make mistakes due to confusion or inattention; however, those who deliberately evade taxes do not increase compliance after audits. The findings have implications for the optimal use of scarce resources in tax agencies.

The Transfer Pricing Directive - Round 2 for an EU ALP?

Richard Collier (Oxford University Centre for Business Taxation), 3 July 2024

The proposed Transfer Pricing Directive is intended to create more certainty for taxpayers, as well as reducing tax avoidance, litigation, double taxation and compliance costs. In this blog and in a recent paper, the author discusses whether these ambitions can realistically be met, and also whether the Directive would create a problematic schism between what would then be an EU version of the transfer pricing rules and the OECD’s Transfer Pricing Guidelines.

Spending Responses to News about Dividend Taxes

Business tax paper of the month - June 2024

Martin B. Holm (University of Oslo), Rustam Jamilov (All Souls College, Oxford), Marek Jasinski (Statistics Norway) and Plamen Nenov (Norges Bank), 17 June 2024

Dividend taxes affect the after-tax return to savings and therefore shape household decisions about saving vs spending. In this blog, the authors study how spending responded to a massive dividend tax reform in Norway that raised the dividend tax rate by 28 percentage points. While spending increased in response to news about the reform, it decreased at the time of the actual implementation. These findings have implications for the effect of interest rates on savings, which is key for a range of questions in economics and finance.

The Efficiency-Equity Tradeoff of the Corporate Income Tax

Business tax paper of the month – May 2024

Patrick Kennedy (UCLA, NBER, and JCT), 20 May 2024

The impact of corporate tax reforms is complex: reducing tax rates may boost investment, raise shareholders’ returns, and increase workers' earnings, but these benefits may be distributed unevenly throughout the economy. In this blog, the authors study these mechanisms in the context of the 2017 Tax Cuts and Jobs Act in the United States, and shed light on the trade-off between efficiency and equity facing policymakers when setting business tax policies.

Harnessing global financial transparency to improve tax enforcement in developing countries

Niels Johannesen (Oxford University Centre for Business Taxation), 9 April 2024 

Governments have developed a potentially powerful approach to enforcing taxes on offshore financial income and wealth: automatic information exchange across borders. In this column, and in a recent paper, the author discusses whether the approach is suitable for developing countries with limited administrative capacity and whether there exists a better alternative. 
 

Designing fair and efficient child benefits