FISCAL «WARS»IN THE CONDITIONS OF THE GLOBAL DIGITAL ECONOMY FORMATION

Background. Along with increasing share of ICT services in global production and trade, additional possibilities have been provided for MNCs to minimize taxes through transfer pricing mechanisms and controlled international transactions for intangible assets. These processes lead to leaching of financial and investment resources from countries in conditions of extremely high demand for their accumulation. The latest regulatory practices of state governments demonstrate the renaissance of economic nationalism in the form of intensified interstate fiscal competition. The aim of this article is to assess the impact of digitalization of the world economy onto the possibilities of fiscal optimization of the MNC and analysis of the latest regulatory practices of state governments through direction of interstate fiscal competition and fiscal «wars». Materials and methods. The information base of the study was scientific foreign and domestic scholars’ publications; data from analytical companies and statistical services; international organizations. The approaches of normative and positive economics, elements of institutional analysis and Case method were used. Results. The article identifies the impact of digitalization of global trade and production on the processes of optimizing fiscal payments by international companies. Systematization and estimation of certain international regulatory practices on digital trade taxation have been carried out and their content has been identified as new fiscal «wars». Conclusion. Recent fiscal «wars»as a factor influencing the world economy should be recognized as a negative phenomenon based on multifactorial differences between countries caused by economic, political, organizational and diplomatic obstacles.Despite targeted steps, there are currently no preconditions for the accession of all participants in transnational trade, including digital, as a general regulatory act to establish uniform rules for its taxation.

Local Government Competition and Regional Green Development in China: The Mediating Role of Environmental Regulation

Green development is an important way to meet the challenges of ecological and environmental protection and economic growth, as well as an inevitable choice to realize China’s sustainable development in the new era. The Chinese economic system is such that local government competition has become a key factor affecting regional green development under the current leadership. Based on the inter-provincial panel data of 30 provinces in mainland China from 1997 to 2017, this paper uses the total-factor non-radial directional distance function and slack-based measure data envelopment analysis (SBM-DEA) to measure the green development efficiency of the provinces. Additionally, it also uses the Malmquist–Luenberger (ML) index to decompose green development efficiency and analyzes its internal driving factors. Finally, taking environmental regulation as a mediating variable, this paper empirically analyzes the influence mechanism of local government competition on green development efficiency from three perspectives including growth competition, fiscal competition and investment competition. The study found that: the green development efficiency of Chinese regions showed a downward trend, with significant regional differences; technological progress is the key factor to improve the efficiency of green development, and its role gradually decreases from eastern to western and central regions; pure technical efficiency has become a bottleneck restricting the improvement of green development efficiency, while scale efficiency shows significant regional differences; the growth competition, fiscal competition and investment competition of local government all have a significant inhibitory effect on the efficiency of green development. This paper puts forward policy suggestions supporting enterprise technology research and development, optimizing energy conservation and emission reduction as well as improving the local government performance evaluation system for green development.

Varieties of Urbanism: A Comparative View of Inequality and the Dual Dimensions of Metropolitan Fragmentation

A large literature on urban politics documents the connection between metropolitan fragmentation and inequality. This article situates the United States comparatively to explore the structural features of local governance that underpin this connection. Examining five metropolitan areas in North America and Europe, the article identifies two distinct dimensions of fragmentation: (a) fragmentation through jurisdictional proliferation (dividing regions into increasing numbers of governments) and (b) fragmentation through resource hoarding (via exclusion, municipal parochialism, and fiscal competition). This research reveals how distinctive the United States is in the ways it combines institutional arrangements that facilitate metropolitan fragmentation (through jurisdictional proliferation) and those that reward such fragmentation (through resource-hoarding opportunities). Non-US cases furnish examples of policies that reduce jurisdictional proliferation or remove resource-hoarding opportunities. Mitigating the inequality-inducing effects of fragmentation is possible, but policies must be designed with an identification of the specific aspects of local governance structures that fuel inequality in the first place.

BRAZILIAN INNOVATION TAX POLICY AND INTERNATIONAL INVESTMENT: EVIDENCE FROM UNITED STATES MULTINATIONALS AND INTERNATIONAL PATENT APPLICATIONS

In the last decades, multinational enterprises (MNEs) have increasedtheir internationalization levels of innovation activities. Brazil has benefited fromsuch changes and received increasing investment from MNEs. In 2005, the federalgovernment approved new tax incentives (Law 11,196/05) to foster business innovationin the country by reducing the tax cost of research and development (R&D) activities.This paper investigates whether these tax breaks have attracted ‘footloose R&D’,diverting international investment from other economies. After a literature reviewon locational factors for R&D attraction and an analysis of the Brazilian case, aneconometric model is presented, using data on R&D investment by U.S. MNEs andpriority patent applications. No evidence that Brazilian tax incentives have attractedinternational R&D from alternative host countries is found. This result is in accordancewith previous research suggesting international R&D performed in Brazil is mainlyadaptive and support-oriented and, for this reason, tax incentives are not a primaryattraction factor. It also suggests that claims that international fiscal competition lead toa zero-sum game may be unfounded for the Brazilian case.

The Legal Aspect of the Tax Competition in EU: Case of Kosovo

The aim of this paper is to analyse the tax competition -fiscal competition within the EU Member States. The complexity of the tax competition concept in the EU will be addressed in two dimensions: the impact of tax competition on the growth of foreign investments and the increase of revenues that preserves the neutrality of common market. In the case of the functioning of tax competition, the Kosovo tax system will be compared to the tax system of the EU. Compilation qualitative methods, individual case study methods, and normative analysis methods were applied in this study. From the results of the treatment one may notice that through increased tax competition, the attractiveness of their tax systems increases automatically through the provision of lower tax rates that may result in foreign investment inflows. Given that resident and non-resident persons within the jurisdiction of a State have equal treatment from a fiscal point of view. It is concluded that the principle of neutrality is fully implemented in the EU Member State and those that express aspirations for joining the EU. The current changes in the tax system of Kosovo, made the system more competitive within the EU area

Tax Arbitration Through Offshore Centres and Tax Havens

The aim of the study is to capture the most relevant aspects regarding the functioning of offshore centres and tax havens, focusing in particular on the most important conceptual and instrumental clarifications. There are several angles to approach the phenomenon of tax evasion that are pointed out in this article, alongside a comparison of various analytical perspectives and, based on these, a number of judgments regarding their (in)opportunity are issued. In order to make a consistent description of the tax havens, it is necessary to clarify the fundamentals, the specific determinants and the factors without which these structures could not exist in the first place, the main hypothesis being that the boundary between tax arbitration and tax evasion is highly ambiguous and this is the major rationale why polemics on this topic arise. The goal is to present as objectively as possible these offshore centres and tax havens activities, which are paramount financial centres, irrespective of the criticism made by those who deem them unfair, immoral or even evil, as well as dangerous. This article focuses on tax planning and tax arbitration practices (e.g., “treaty shopping”), concluding with a collection of rationales for a balanced view on fiscal competition.