Tax exporting occurs when a
country
A country is a distinct part of the world, such as a state, nation, or other political entity. It may be a sovereign state or make up one part of a larger state. For example, the country of Japan is an independent, sovereign state, while the ...
(or other jurisdiction) shifts its
tax burden
In economics, tax incidence or tax burden is the effect of a particular tax on the distribution of economic welfare. Economists distinguish between the entities who ultimately bear the tax burden and those on whom tax is initially imposed. The t ...
(partially) abroad.
For example, if residents of country A hold shares of a company in country B, the government in B might want to levy an inefficiently high tax on this company's profits since the tax is partially borne by the shareholders in A.
Tax exporting does not necessarily involve direct taxation of foreign residents. It can also work through other economic channels, such as price changes.
See also
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Capital flight
Capital flight, in economics, occurs when assets or money rapidly flow out of a country, due to an event of economic consequence or as the result of a political event such as regime change or economic globalization. Such events could be an increas ...
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Capital strike Capital strike is the practice of businesses withholding any form of new investment in an economy, in order to attain some form of favorable policy. Capital strikes may arise from the determination that return on investment may be low or nonexistent ...
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Luxembourg leaks
Luxembourg Leaks (sometimes shortened to Lux Leaks or LuxLeaks) is the name of a financial scandal revealed in November 2014 by a journalistic investigation conducted by the International Consortium of Investigative Journalists. It is based o ...
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Tax avoidance
Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. A tax shelter is one type of tax avoidance, and tax havens are jurisdict ...
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Tax competition
Tax competition, a form of regulatory competition, exists when governments use reductions in fiscal burdens to encourage the inflow of productive resources or to discourage the exodus of those resources. Often, this means a governmental strategy ...
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Tax inversion
A tax inversion or corporate tax inversion is a form of tax avoidance where a corporation restructures so that the current parent is replaced by a foreign parent, and the original parent company becomes a subsidiary of the foreign parent, thus mov ...
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Double Irish arrangement
The Double Irish arrangement was a base erosion and profit shifting (BEPS) corporate tax avoidance tool used mostly by United States multinationals since the late 1980s to avoid corporate taxation on non-U.S. profits. It was the largest tax ...
References
Further reading
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International taxation
Tax
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