Profit Taxation in the Global Economy

URL study guide

https://studiegids.vu.nl/en/courses/2025-2026/E_ACC_PTGE

Course Objective

The main objective is that students are able to critically evaluate international tax rules and policies on dimensions related to economic efficiency, fairness, tax avoidance, and tax competition. This is realized through the following lower level objectives:Understand and explain how taxes affect business decisions.Understand and evaluate the current international tax setting, incentives and (tax avoidance) behavior.Evaluate and explore possibilities, limitations and behavioral consequences of new international tax policy initiatives on the dimensions indicated in the main objective.Explain and understand selected empirical research on objectives 1-3.For the first three objectives, students are introduced to the economic theory on these topics (Bridging theory and practice
- knowlegde) and required to make business decisions in fictional settings on these topics (Bridging theory and practice
- application). A connection to seminal or recent academic literature is made for objective 4 (Academic and research skills). Students will have to report on the reasons of decisions made (Social professional skills).

Course Content

Students will learn to evaluate business taxation issues and policies in a global and changing economy from a business and country perspective. Background: Multinational enterprises are often accused of tax avoidance. Governments or other organisations like the OECD search for ways to curb tax avoidance, but countries also strategically use tax advantages to attract businesses. At the same time, the new economy based on intangible assets and global sales challenges the conventional taxing system. New policy initiatives are proposed to curb tax avoidance, allocate tax revenues fairly across jurisdictions, and prevent undesirable distortions of economic decisions. Topics and theory: Students will learn how tax policies affect economically driven strategic business decisions, what economic incentives the current profit taxation system yields including ways to shift taxable profits to low-tax jurisdictions, and what strengths, limitations, and (un)intended consequences new tax initiatives bring. Tax rules and policies can then be evaluated in light of how it incentivizes efficient economic decisions, how it fairly allocates taxable profits to different jurisdictions, how it curbs tax avoidance, and how it affects tax competition that jurisdictions use to attract businesses.

Teaching Methods

Pre-recordings and (interactive) main lectures will cover theory and related research. During the weekly tutorials, students work on practical assignments (mandatory).

Method of Assessment

The objectives will be assessed using weekly assignments with short reports and a final exam.

Literature

Selected chapters from three online available books: Taxing Profit in a Global Economy | Oxford University Centre for Business Taxation Corporate Income Taxes under Pressure – Why Reform Is Needed and How It Could Be Designed | IMF eLibrary International Company Taxation: An Introduction to the Legal and Economic Principles | SpringerLink Selected articles

Target Audience

Students with a background in accounting, economics, business, or finance interested in the role of taxation in a global and changing economy from a business and/or a policy perspective.

Entry Requirements

Students should have sufficient economic knowledge and calculative skills to evaluate different alternatives based on net present value or other economic objectives. Students should be able to read and understand empirical economic literature.