{
  "title": "Capital Account Liberalization and Corporate Taxes",
  "publication": "IMF Working Papers, September 1, 2003",
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  "summary": "This paper studies whether exchange controls, particularly on the capital account, affect the choice of corporate tax rates, using a panel of 21 OECD countries over the period 1983-99.",
  "sections": [
    {
      "heading": "Study scope and data",
      "content": "- Panel of 21 OECD countries over the period 1983-99.\n- Uses a unique dataset with several different measures of the corporate tax rate calculated from the actual parameters of the tax systems.\n- Subjects: Average effective tax rate, Balance of payments, Capital controls, Corporate income tax, Corporate taxes, Exchange restrictions, Foreign exchange, Tax policy, Taxes.\n- Keywords: Average effective tax rate, Capital controls, capital mobility, competition literature, Corporate income tax, corporate tax tax rate, Corporate taxes, exchange controls, Exchange restrictions, globalization, home country tax rate, interaction effect, measure CMF, measures Tit, tax competition, WP."
    },
    {
      "heading": "Methodology and analytical innovation",
      "content": "- Allows exchange controls to affect:\n  - the intensity of strategic interaction between countries in setting taxes, and\n  - the levels of tax they choose.\n- Employs multiple corporate tax rate measures (statutory, effective average, and others) derived from tax-system parameters."
    },
    {
      "heading": "Key findings",
      "content": "- Evidence that a unilateral liberalization of exchange controls lowers the level of a country’s tax, other things equal.\n- Evidence that liberalization increases strategic interaction in tax-setting between countries.\n- These effects are stronger if:\n  - the country is a high-tax one, and\n  - the tax measure is the statutory or effective average tax.\n- Evidence that a country’s own tax rates are reduced by liberalization of exchange controls in other countries."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Capital account liberalization can intensify international tax competition.\n- Liberalization may lead to lower corporate tax levels domestically and via cross-border policy spillovers.\n- Effects depend on initial tax levels (stronger for high-tax countries) and on which corporate tax measure is considered (statutory or effective average).\n\n---\n\n Content in this bundle\n\n- 146516\n  - 146516 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 146516 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/capital-account-liberalization-and-corporate-taxes-16767"
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    "[Markdown version](/en/publications/wp/issues/2016/12/30/capital-account-liberalization-and-corporate-taxes-16767/index.md)",
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    "Authors: Ben Lockwood, Michael B. Devereux, Michela Redoano",
    "Published: September 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451859133.001",
    "Panel of 21 OECD countries over the period 1983-99.",
    "Uses a unique dataset with several different measures of the corporate tax rate calculated from the actual parameters of the tax systems.",
    "Subjects: Average effective tax rate, Balance of payments, Capital controls, Corporate income tax, Corporate taxes, Exchange restrictions, Foreign exchange, Tax policy, Taxes.",
    "Keywords: Average effective tax rate, Capital controls, capital mobility, competition literature, Corporate income tax, corporate tax tax rate, Corporate taxes, exchange controls, Exchange restrictions, globalization, home country tax rate, interaction effect, measure CMF, measures Tit, tax competition, WP.",
    "Allows exchange controls to affect:",
    "Employs multiple corporate tax rate measures (statutory, effective average, and others) derived from tax-system parameters.",
    "Evidence that a unilateral liberalization of exchange controls lowers the level of a country’s tax, other things equal.",
    "Evidence that liberalization increases strategic interaction in tax-setting between countries.",
    "These effects are stronger if:",
    "Evidence that a country’s own tax rates are reduced by liberalization of exchange controls in other countries.",
    "Capital account liberalization can intensify international tax competition.",
    "Liberalization may lead to lower corporate tax levels domestically and via cross-border policy spillovers.",
    "Effects depend on initial tax levels (stronger for high-tax countries) and on which corporate tax measure is considered (statutory or effective average).",
    "**146516**"
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