Max Planck Institute for Tax Law and Public Finance

Max Planck Institute for Tax Law and Public Finance

The Max Planck Institute for Tax Law and Public Finance was founded as of 1st January 2011. It carries on legal and economic research in the area of taxation and adjacent fields in public economics and business law. Exemplary is the work on international tax competition, fiscal crises or taxation of multinational enterprises. It consists of the department for business and tax law and the department of public economics which have originally been part of the former Max Planck Institute for Intellectual Property, Competition and Tax Law.

Contact

Marstallplatz 1
80539 München
Phone: +49 89 24246-0
Fax: +49 89 24246-501

PhD opportunities

This institute has no International Max Planck Research School (IMPRS).

There is always the possibility to do a PhD. Please contact the directors or research group leaders at the Institute.

Research highlights from our yearbook
The yearbook of the Max Planck Society illustrates the research carried out at our institutes. We selected a few reports from our 2017 yearbook to illustrate the variety and diversity of topics and projects. more
Taxes that vanish into thin air
International corporations such as Apple, Starbucks and Amazon have for years successfully avoided paying tax on their corporate profits. Aided by the tax competition between states, they shift their money to countries that have low tax rates and guarantee to levy tax only on domestic profits. Our author explains why it is by no means easy for the international community to counter these tricks. more
Once the conflict is over, solidarity in alliances goes out of the window
Anyone who competes or is at war should be careful when entering alliances. Above all this applies when there is booty to be shared afterwards. more
The future of the Eurozone

The future of the Eurozone

News August 23, 2011
In the few days prior to 8 May 2010, European country leaders noticed a rapid loss of market confidence in government bonds. This loss of confidence not only affected bonds issued by the Greek government but also government bonds of several other member countries in the eurozone. more
International corporations such as Apple, Starbucks and Amazon have for years successfully avoided paying tax on their corporate profits. Aided by tax competition between nations, they shift their money to countries that have low tax rates and that guarantee that only domestic profits will be taxed. Our author explains why it is far from easy for the international community to counter these tricks.
Greece, Ireland and Portugal avoided bankruptcy only due to a bailout by the European Union and the International Monetary Fund. The stability of the European Monetary Union hangs in the balance.
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Tax havens attract investors by promising to not reveal information about accrued capital income, and thereby facilitating tax evasion. Convincing tax havens to participate in an exchange of information by exerting political pressure is difficult as they derive substantial benefits from the wealth management business. A study at the Max Planck Institute for Tax Law and Public Finance shows how the tax havens’ business model relies on trust between a tax haven and its investors as well as among the many individual investors, and how a disruption of trust can create additional transparency. more

When failure motivates

2016 Tan, Fangfang
Social and Behavioural Sciences

A recently published paper by Qiang Fu, Changxia Ke and Fangfang Tan offers a first empirical evidence of the impact of progress feedback between team and individual tournaments, and provides new insights on team incentives. The economists show: The leader in a competition performs worse when he realizes his advantageous position, whereas the laggard will benefit from knowing that he lies behind. This applies to individual contestants, but not to contestants competing in a team.

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A project at the Max Planck Institute for Tax Law and Public Finance intends to clarify the phenomenon of double non-taxation and to advocate for its neutrality as an objective outcome. Using hybrid entities as an example of analysis, this work aims to demonstrate that the sole result of non-taxation should not be a matter of concern in any cross-border transaction. Instead, the real target should be in determining whether the natural disparities between tax legislations can be subject to abuse, and if so, how to counteract it. more

Public infrastructure investments do foster growth

2015 Hornung, Erik
Social and Behavioural Sciences
A recent study at the Max Planck Institute for Tax Law and Public Finance sheds light on the role of railroads in the industrial growth process for the historical German state of Prussia. It shows that investment in the transport infrastructure has a long-term impact on economic growth. more

In the European Union, eleven member states want to adopt a uniform financial transaction tax. The objectives of the financial transaction tax are to generate tax revenues and to create disincentives for certain politically undesirable financial transactions. The Max Planck Institute for Tax Law and Public Finance analyses whether the second proposal directive for a financial transaction tax will achieve its objectives and whether it is sufficiently coordinated with the European financial market regulation.

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How should corporate managers behave in the area of tax planning, considering the rules of the game established by corporate law? Should taxes be treated as a cost to be mitigated for the sake of greater profitability or a social duty to be preferred even if that means reduced profits? The corporate laws in Germany, US (Delaware), England and Brazil serve as starting point for a research project at the Max Planck Institute for Tax Law and Public Finance. more

Gender differences in tax compliance behavior

2014 Qari, Salmai
Social and Behavioural Sciences
In a tax compliance experiment with real face-to-face communication between declaring subjects and officers, researchers analyze the role of both the subject’s and the officer’s gender for deceptive behavior. Their results show that the amount of underreporting generally does not depend on the officer’s gender and that there is no evidence that the matching of genders plays a role for deceptive behavior. Moreover, as a reaction to a high rather than a low penalty, women and men both reduce deceptive behavior to the same extent and therefore seem to have similar risk taking attitudes. more
A policy and economics-oriented legal analysis of double taxation conventions reveals the current challenges of taxing international services, namely achieving a compromise between conflicting interests of developed and developing countries as well as rendering the tax treatment of different service categories more coherent. Moreover, double taxation conventions need to be brought in line with today’s reality in which the economic connection of a service provider with a territory does not necessarily presuppose its physical presence. more

Bargaining over tax information exchange

2013 Elsayyad, May
Jurisprudence
This paper sheds light on the recent G20 Crackdown on tax havens. It empirically studies recent treaty signings between tax havens and OECD countries as the outcome of a bargaining process over treaty form. Havens can decide not to sign an agreement, to sign a tax information exchange agreement or to sign a double taxation convention. Our analysis shows that havens are less likely to cooperate the higher their economic clout, while the potential of economic and political defensive measures can effect haven cooperation positively. more

Regulation by means of private law

2012 Alexander Hellgardt
Jurisprudence

The balancing of private interests has hitherto been seen as the primary task of private law. However, a research project at the Max Planck Institute for Tax Law and Public Finance shows that private law is better conceived of as a tool which the legislator may use to regulate economy or society. In this respect, private law competes with criminal law and administrative law and serves the public interest. A new concept of private law does not only challenge jurisprudential theories but also entails important consequences for legislation and legal practice.

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Market Power and the Welfare Effects of Taxation

2012 Morath, Florian
Jurisprudence
The welfare effects of taxation and the impact of market power on tax incidence are decisive for the evaluation of tax reforms. Laboratory experiments confirm the theory-based prediction on welfare effects of taxation: firms with market power bear a large share of the burden of the increase of a unit sales tax, while firms with no market power are able to shift the burden of a tax increase on to the consumers. more
A possible credit crunch caused by the recent financial crisis has renewed the debate on fiscal ways to strengthen equity financing. While economists, despite extensive research efforts, have had great difficulty providing any empirical evidence that taxes matter for the financial leverage of corporations, the study presented here has empirically shown the influence of taxes on firms’ financial decisions. This allows for a precise quantification of the effect of taxes on financial structure. more
Profit shifting by means of systematic transfer of valuable Intellectual Property to special IP-Holding companies is very popular and has been in the public focus for many years. A research project at the Max-Planck-Institute for Intellectual Property, Competition and Tax Law analyses the different concepts to prevent an erosion of the national tax base through tax motivated business structures which are based on the cross-border transfer of valuable intangible assets. The main objective is to make deficits of the existing rules clear to the legislative body and to encourage improvements. more
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