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We study how differential taxation of personal and corporate income impacts the corporate share of new firms for 31 countries over 1998–2018. We build a novel database that identifies the tax treatment of partnerships either as corporations or as passthrough entities. We find a tax elasticity of 0.07 for the period 1998–2007 and of 0.12 for 2008–2018. Estimates are larger for countries where the presence of partnerships is nonnegligible and where they are treated as passthrough for tax purposes, suggesting that the tax sensitivity of organizational-form choice interacts with the relevance of partnerships and their tax treatment.

According to the 2018 Mercer Global Pension Index, the pension systems of Denmark, Finland, and the Netherlands are the best three in the world. They ensure a minimum old age income for all and provide relatively high replacement rates for a large majority of citizens. At the same time, their fiscal sustainability is relatively robust with respect to population aging. This article seeks to identify differences and similarities between these three pension systems, including the institutional framework within which they operate. The authors emphasize the collective and compulsory nature of the earnings-related pension schemes and the important role for social partners in decision making as their common elements of success. They also discuss the most important challenges these systems face, namely, how to maintain the legitimacy of their decision-making processes given declining unionization and how to avoid restricting individual choices too much. TOPICS:Retirement, social security, pension funds, wealth management Key Findings • The 2018 Mercer Global Pension Index ranked the pension systems of Denmark, Finland, and the Netherlands as the best three in the world. Their common strengths include minimum old-age income for all and relatively high replacement rates for most citizens, together with substantial funding and automatic links between the pension eligibility age and life expectancy, which improve their fiscal sustainability. • The important role of “social partners”—representatives of employers and employees—in the three pension systems have likely been critically important to get acceptance for policies preparing for future demographic burdens and to protect the pension systems from populist proposals. • The pension systems may be subject to some legitimacy issues. This is the case because 1) participation in the pension systems is mandatory for workers; 2) decision makers are often elected based on low voter turnouts among union members; and 3) unionization is declining in all three countries. Another challenge these pension systems face is how to provide sufficient flexibility regarding individual saving for old age within a compulsory system.

The cost-sharing exemption applied in the field of VAT is losing its relevance rapidly as it is becoming clear that it cannot be applied in many sectors of the economy after all.

There is no doubt that tax administration is a complex matter. It is institutionalised by a governance framework which is strongly influenced by legal traditions, state governance approaches, historical developments, and norms and values of society. While there are many common aspects of national tax administration frameworks, there is no single governance framework that applies everywhere. Questions such as the degree of autonomy granted to a tax authority and scope of discretionary powers need to be evaluated in the light of existing dysfunctionalities in governmental institutions, scale of political interference in public administration, and the system of ‘checks and balances’. In daily life, the efficiency and effectivity of the tax administration is impacted by rapid changes in its operating environment, and by the nature of the relationship the between tax authority and taxpayer. To deal with the effects of globalisation and IT developments, tax authorities increasingly rely on voluntary compliance by taxpayer. Internationally, several measures have been developed and implemented to enhance voluntary compliance, including compliance programs as well as reporting requirements. Additionally, benchmarking tools have been developed to measure tax administration performance and to identify good practices. The recent developments in the fight against tax evasion and aggressive tax planning push the boundaries of tax administration and challenges its capacities. At the same time, these developments create uncertainty for businesses in the application of tax law. At the end of the day, the practical meaning of any tax law provision is greatly determined by the manner how the tax authority administers it and enforces it.

The international corporate tax system is considered a network. Just like for transportation, “shortest” paths are computed, which minimize tax payments for multinational enterprises when they repatriate profits. We include corporate income tax rates, withholding taxes on dividends, double tax treaties, and double taxation relief methods. We find that treaty shopping leads to an average potential reduction of the tax burden on repatriated dividends of about 6% points. An indicator for centrality in the tax network identifies the UK, Luxembourg, and the Netherlands as the most important conduit countries. Low-tax havens do not have a crucial role in reducing dividend repatriation taxes. By contrast, tax haven financial centres do. In the regressions we find that the centrality measures are robustly significant explanatory variables for bilateral FDI stocks. This also holds for our treaty shopping indicator.

Cost sharing can be a headache for financial services providers in the EU, as it is likely to lead to irrecoverable input VAT payable on intra-group transactions. In this contribution the authors discuss the extent of the problem and possible solutions. In this respect, the authors start by taking a closer look at the impact of cost sharing in the financial services industry. Also, the extent to which cost sharing leads to taxable transactions on the basis of the EU VAT Directive and the related case law of the European Court of Justice is explored. Furthermore, a number of provisions in the EU VAT Directive that deal with cost sharing, including the VAT grouping option and the cost sharing exemption, are examined more closely. The authors also assay a number of cost sharing solutions implemented at the level of specific Member States. The chapter concludes with a number of policy recommendations, aimed at a more uniform and efficient treatment of cost sharing throughout the EU.

Using Dutch transaction-level data on international trade we find that the intensive margin drives Dutch trade growth year by year. After 6 years, new trade relations cover about 50 percent of Dutch exports. Each year 40 percent of the relations are new, but only 25 percent survives after two years. We distinguish several firm-country-product (FCP) relations characterised by the export familiarity of the firm, country or product to identify differences in survival rates. The estimates show that the hazard rates of trade relations with new exporting firms or incumbent firms to new countries are about 15 percent lower. EU membership decreases the hazard rate by 40 percent. Initial sales are also important. Relations with an initial export value of about 50 thousand euro do not survive, while those with an initial value of 200 thousand euro exist after a few years. Exports with homogeneous goods tend to have higher initial trade values and the hazard is about 10 percent lower than those with heterogeneous goods. Read also: De economist, juni 2015, Volume 163, Issue 2, pp 155-176

This special issue of JITC focuses on the globalization of trade in services and the effects on small open economies. It looks\n at a number of issues relating to international trade in services to re-evaluate the degree to which services are traded and\n tradable, the degree to which such trade is increasing, the implications of globalization and off-shoring and the policy responses\n required both to foster international integration in services and to react to the likely economic implications.

This paper analyses firms’ export entry decisions and their subsequent expansion to other export markets using Dutch firm-level international transaction data. In particular new exporters increase quickly the distance between their export markets and their home country. They are also going to export to countries in which the institutional and regulatory quality is lower. We show that firms follow a stepping stone approach for learning to export and to enter distant markets. The probability to enter a market at 1,000 km from the Netherlands increases by about 25% if the firm already exports to a market at 500 km from the new one.

Objective:To describe physical activity of participants in the European Prospective Investigation into Cancer and Nutrition (EPIC).Design:A cross-sectional analysis of baseline data of a European prospective cohort study.Subjects:This analysis was restricted to participants in the age group 50–64 years, which was represented in all EPIC centres. It involved 236 386 participants from 25 centres in nine countries. In each EPIC centre, physical activity was assessed by standardised and validated questions. Frequency distribution of type of professional activity and participation in non-professional activities, and age-adjusted means, medians and percentiles of time dedicated to non-professional activities are presented for men and women from each centre.Results:Professional activity was most frequently classified as sedentary or standing in all centres. There was a wide variation regarding participation in different types of non-professional activities and time dedicated to these activities across EPIC centres. Over 80% of all EPIC participants engaged in walking, while less than 50% of the subjects participated in sport. Total time dedicated to recreational activities was highest among the Dutch participants and lowest among men from Malmö (Sweden) and women from Naples (Italy). In all centres, total time dedicated to recreational activity in the summer was higher than in the winter. Women from southern Europe spent the most time on housekeeping.Conclusions:There is a considerable variation of physical activity across EPIC centres. This variation was especially evident for recreational activities in both men and women.

Terugkeer van de materiële fusie-eis?

A popular view is that ageing populations increase health expenditure to GDP ratios because health expenditure correlates positively with age and because the concomitant shrinking of the labour force depresses GDP. The resulting increase in transfers from the young to the old then calls for a reform of health care policies. This article critically examines the arguments underlying this view. It gives credit to factors that counteract the expenditure effect, the effects upon health care market and labour market distortions and the effects upon intergenerational solidarity. Although important, these factors are found to have insufficient weight to invalidate the popular view.