Exit Tax in the World of International Migration of Companies and Individuals

Conference Proceedings. 16th International Scientific Conference Globalization and Its Socio-Economic Consequences. University of Zilina, The Faculty of Operation and Economics of Transport and Communication, Department of Economics; ISBN 978-80-8154-191-9.

14 Pages Posted: 12 Dec 2017

See all articles by Jana Kubicova

Jana Kubicova

University of Economics in Bratislava

Date Written: October 5, 2016

Abstract

Globalization of the world economy enables companies and individuals to move across borders and seek new opportunities and business options in other countries. To do so persons may need to transfer residency or shift assets of permanent establishment. The adverse side of such a migration lies in the loss of tax revenues from taxation of capital gains that occur when shifted assets are sold in new country, frequently low-tax jurisdiction. Original home country can prevent loss of tax revenues from taxation of capital gain by imposition of an exit tax. Despite rationale of exit tax its impact in globalized world might be controversial, as it represents barrier to free movement of capital and persons and freedom of establishment, which was mirrored especially in a number of controversial decisions of the CJ EU. This paper investigates presence of the exit tax in the OECD and EU Member States and focuses on the most problematic provision – timing and possibility to defer payment of exit tax until the asset is sold which can soften adverse effect of exit tax on international movement of persons. This is subject of harmonisation of anti-tax-avoidance measures in the EU however the OECD anti- avoidance package (BEPS) does not include exit tax.

Keywords: international mobility, companies, capital gains, exit tax, tax avoidance harmonisation

JEL Classification: F22, F60, H26, K33, K34

Suggested Citation

Kubicova, Jana, Exit Tax in the World of International Migration of Companies and Individuals (October 5, 2016). Conference Proceedings. 16th International Scientific Conference Globalization and Its Socio-Economic Consequences. University of Zilina, The Faculty of Operation and Economics of Transport and Communication, Department of Economics; ISBN 978-80-8154-191-9. , Available at SSRN: https://ssrn.com/abstract=3084669

Jana Kubicova (Contact Author)

University of Economics in Bratislava ( email )

Dolnozemská cesta 1
Bratislava, 852 35
Slovakia

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