Chapter 5

The Theory of International Tax Competition and Coordination

Michael Keen* and Kai A. Konrad,,    *International Monetary Fund, Fiscal Affairs Department, Washington DC 20431, USA, Max Planck Institute for Tax Law and Public Finance, Marstallplatz 1, 80539 Munich, Germany, Social Science Research Center Berlin, Germany


This chapter surveys the theory of international tax competition and coordination, which, matching the increasing policy importance of the topic, has grown substantially over the last 30 years. It focuses on the taxation of capital income, stressing that issues arise not only in relation to movements of productive capital—the primary concern in the earliest literature—but also in relation to the shifting of ...

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