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N° 185 |
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| December 1999 |
| A Single Currency, a Single
Tax Policy? |
Agnès Bénassy-Quéré
Amina Lahrèche-Révil |
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| Companies are becoming ever more mobile within
Europe's unified monetary zone, and States may use taxation to influence theirlocation
of production. Scenarios constructed to examine this issue show that there could
be risks of tax competition to attract companies. Nevertheless, it would be possible
to move towards some form of European tax harmonisation from a fiscal point of
view. A study of the United Kingdom indicates that such harmonisationwould strengthen
the attractiveness of Britain as a location, but would causethe euro-zone to lose
about half of the Foreign Direct Investment flows generatedby the single currency. |
Abstract |
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