Work

Optimal avoidability in cross-border minimum taxation

Year: 2026

Type: article

Abstract: Many tax regimes collect revenue to the extent that other governments do not. This paper develops a theory of how such cross-border minimum taxes should be designed, focusing on choices that affect avoidance of the regime. Making a minimum tax more difficult to avoid retains more firms within the regime but weakens competition among tax havens. Havens then raise their rates toward the minimum, reducing the top-up tax rate on shifted profit. As a result, an avoidable minimum tax can raise more revenue for the governments that impose it than an unavoidable one.

Source: Journal of Public Economics

DOI: 10.1016/j.jpubeco.2026.105809

Author: Adam Kern

Institution: University of San Diego

Language: English

Topic: Corporate Taxation and Avoidance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $4,510