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Using recently published country-by-country reporting data released by the United States Internal Revenue Service, we assess United States multinationals' activity in the single market, aiming to contribute with data-based evidence to the ongoing political debate about the potential changes in the European corporate tax system. Our findings show evidence of artificial profit shifting across member States under the current method to allocate profits of multinational enterprises, with the Netherlands, Luxembourg and Ireland appearing to be the countries showing a higher degree of complicity with these activities. Such actions challenge fair international taxation in the European Union, distorting European internal competition and hampering tax revenue collection. Although it may not be (yet) the time for a worldwide unitary taxation approach, the analysis highlights the urgency for the European Union to adopt a formulary apportionment approach, overhauling a century-old set of global tax rules based on the separate entity approach. Keywords : country-by-country reporting, European Union, formulary apportionment, tax havens, United States multinationals enterprises JEL classification codes : D22, F23, F60, H25, H26, 1. Introduction This study adds to the growing research on the activity of multinational enterprises (MNEs) in the European single market (Garcia-Bernardo et al., 2021 and 2022). Starting from the [...]

Industrialized countries increasingly use targeted subsidies to lessen Arms' disadvantages caused by climate change, geopolitical realignment of trade relationships and local COVID-19 pandemic dislocations. The debate over the United States Inflationary Reduction Act and the European Union criticism of it because of its effect on Arms' investment location choices exemplify how subsidies affect investment flows. We investigate to what extent different subsidy schemes affect Arms' investment location choices and explore the effect on two dimensions: immediacy (direct versus indirect) and firm specificity (firm-specific versus non-firm-specific). Using a sample of United States MNEs and their investments in subsidiaries in the European Union and China, we find that direct subsidies have a greater positive effect on investment than indirect subsidies, and that non- firm-specific subsidies have a greater positive effect than firm-specific subsidies. Our study establishes a more nuanced understanding of subsidy effects, suggesting that policymakers should align their subsidy schemes for attracting foreign direct investment accordingly. Keywords: foreign direct investment, institutions, investment location choice, policy support, subsidies JEL classification codes: D04, D78, H29, L52, 1. Introduction The rapid succession of recent and ongoing international crises, such as the COVID-19 pandemic (WHO, 2023), the Russia-Ukraine war (1) with its resulting shock to food and energy [...]

This paper examines the determinants of residential C[O.sub.2] emissions, which are not covered by the European Union Emissions Trading System (EU ETS), in 19 European countries between 2000-2017. Using both static and dynamic panel models, we found strong relationships between C[O.sub.2] emissions per capita, GDP per capita, energy prices and heating needs. We then assessed the impact of European carbon taxation and show that a [euro]20/tonne C[O.sub.2] tax lowers emissions by 1% on average. We found that this tax affects countries differently in terms of tax revenue-to-GDP ratio. Poland and the Czech Republic would have to pay the highest contribution, and Portugal and Denmark the lowest. Finally, we propose a scenario that equalizes countries' tax burdens. We show that, were Europe to redistribute all tax revenues, the main beneficiaries would be Poland and Belgium, while Denmark and Luxembourg would have to pay a surtax. Keywords: C[O.sub.2] emissions, Residential Sector, Panel data, Energy prices, Carbon tax, 1. INTRODUCTION According to European Environment Agency (2020), EU greenhouse gas emissions decreased by 2% in 2018, but this promising trend is still insufficient, for at least two reasons. First, [...]

Table of contents Foreword Executive summary 1. Key policy insights 1.1. The economy is facing external headwinds 1.2. Financial stability risks should be monitored closely 1.3. Monetary policy has been [...]

Foreword This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member [...]

A number of regional trade agreements (RTAs) include investment protection provisions that may limit a country's ability to change tax measures. This limitation could raise concerns for States as regards the recently agreed global minimum tax under the Global Anti-Base Erosion (GloBE) Rules, as its implementation could amount to a breach of investment obligations. Therefore, this paper analyses how the GloBE Rules and their impact on investment incentives interact with investment provisions in RTAs, also considering the impact of the minimum tax on regional integration efforts and the potential for a regional approach to its implementation. Keywords: GloBE, IIA, international taxation, Pillar Two, RTA, tax incentives JEL classification codes: F13, F21, F23, H25, K34, 1. Introduction From an economic standpoint, investment protection is argued to increase foreign direct investment (FDI) by providing certainty to investors and lessening the risks they face. (1) This argument [...]

Greece has rebounded from the COVID-19 crisis, generating strong employment growth. Government support measures, implementation of the Greece 2.0 Recovery and Resilience Package and the reforms of the past decade have been supporting the economy. However, headwinds from surging energy prices and uncertainty following Russia's war of aggression against Ukraine have slowed the recovery. Returning the budget to surplus, better targeting energy support measures and maintaining government revenues while broadening the tax base and improving its efficiency will help sustain the recovery and Greece's prospects of achieving an investment-grade sovereign debt rating. Maintaining the reform momentum, prioritising banks' health and addressing the long-standing barriers to private investment, can help maintain this momentum into the long term. This would also support Greece in contributing its share to address climate change, by achieving net zero emissions, while raising living standards. The changing climate is already disrupting livelihoods and well-being in Greece. A well-chosen mix of carbon pricing, public infrastructure investments, raising buildings' energy efficiency and moving transport into low-emission modes can achieve emission cuts cost-effectively, while making people better off with improved housing quality and mobility. Engaging all stakeholders, maintaining a consensus and supporting vulnerable households affected by the green economy transition will help ensure progress continues into the longer term. SPECIAL FEATURE: THE GREEN ECONOMY TRANSITION, Foreword This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member [...]

Foreword This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member [...]