No dia 3 de abril, João Pereira dos Santos, professor do ISEG, apresenta o estudo “Treasure islands, real jobs? The impact of reforming an EU low-tax jurisdiction“.
Entrada livre.
Abstract:
In recent years, jurisdictions characterized by low/zero corporate tax rates have introduced economic substance requirements, which aim at ensuring that companies incorporated there maintain a minimum level of employment and real operations. These policies, advocated by entities like the OECD and EU institutions, seek to establish a fair playing field, free from uncompetitive tax avoidance practices. The impact of these policies is largely unexplored, in part due to data opacity. Focusing on a leading jurisdiction to set up employment requirements – Zona Franca da Madeira (ZFM) – this paper takes a first step in filling that gap. Originally approved by the EU as a State Aid program to stimulate regional development, the ZFM underwent a reform in 2012 that established substance requirements. For incumbent workers, we uncover evidence of an increased likelihood of part-time employment, a rise in the number of firms for which each worker simultaneously works, and an increase in overall wages larger than 10% after the introduction of employment requirements. For new employees who moved to ZFM after the reform, we find evidence that they may have been attracted by reduced workloads rather than higher monthly wages.