Empirical Evidence on Tax Cooperation Between Sub-Central Administrations

IEB Working Paper N. 2015/07

28 Pages Posted: 20 Mar 2015

See all articles by José Ma. Duran-Cabré

José Ma. Duran-Cabré

University of Barcelona

Alejandro Esteller-More

University of Barcelona

Luca Salvadori

University of Barcelona - Institut d'Economia de Barcelona (IEB)

Date Written: March 2, 2015

Abstract

The literature on horizontal tax interdependence pays limited attention to interactions in administrative policies, although they can play a large role in determining the amount of tax revenues collected. We investigate the incentives for sub-central tax authority cooperation in a decentralized context, with the aim of identifying the determinants of that cooperation. Our results are congruent with standard theory; in particular, the existence of reciprocity is essential for sharing tax information, but there is sluggishness in this process, which is partly the result of the short-sighted behaviour of tax authorities influenced by budget constraints. Hence, this is good news for the functioning of a decentralized tax administration, as in the medium-long run the gains to be made from sharing tax information are achieved.

Keywords: Tax information sharing, reciprocity, fiscal federalism

JEL Classification: H71, H77, H83

Suggested Citation

Duran-Cabré, José Ma. and Esteller-More, Alejandro and Salvadori, Luca, Empirical Evidence on Tax Cooperation Between Sub-Central Administrations (March 2, 2015). IEB Working Paper N. 2015/07, Available at SSRN: https://ssrn.com/abstract=2580145 or http://dx.doi.org/10.2139/ssrn.2580145

José Ma. Duran-Cabré (Contact Author)

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

Alejandro Esteller-More

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

Luca Salvadori

University of Barcelona - Institut d'Economia de Barcelona (IEB) ( email )

c/ Tinent Coronel Valenzuela, 1-11
Barcelona, 08034
Spain

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