Title of the Lecture: „Tax Competition Effects of a Minimum Tax Rate: Empirical Evidence from German Municipalities”

Abstract: The paper explores the effects of a federal law that requires previously unregulated municipalities in Germany to set a minimum tax rate of about 9% on firms' taxable profits. In particular, we examine the tax-policy response of municipalities that compete locally with ``tax-haven municipalities''. We use the latter term to refer to those municipalities that originally have set lower and, in some cases, even zero tax rates. The analysis distinguishes treated and not-treated municipalities based on their distance to a tax-haven. Our results show that the majority of municipalities did not change their tax policy. Only high-tax municipalities show a response – they have actually reduced their tax rates without experiencing a decline in tax revenues.

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