VIES-Seminar with Mathieu Parenti (Paris School of Economics)
The FIW Research Centre International Economics and its partners kindly invite you to participate in the upcoming Vienna International Economics Seminar (VIES) on the topic:
An Economic Analysis of Extraterritorial Taxation, joint with G. Zucman.
Abstract:
This paper provides an economic analysis of extraterritorial taxation, whereby a country imposes top-up taxes on the foreign profits of multinationals accessing its market to enforce a minimum effective rate. We characterize incidence, welfare, and optimal unilateral policy in a flexible monopolistic-competition model, with extensions to oligopoly and carbon taxation. Four results emerge. First, extraterritorial taxation raises revenue but distorts prices upward in the taxing country and downward elsewhere through sales reshuffling; when foreign profits are untaxed, revenue gains dominate consumer losses for any country, regardless of size. Second, with a positive foreign rate welfare effects become ambiguous: the optimal top-up rises with domestic market share and falls with the foreign rate, so only sufficiently large coalitions can overtax already-taxed firms. Third, extraterritorial profit taxation welfare-dominates tariffs. Fourth, per-capita gains rise more than proportionally with coalition size. Rather than provoking retaliation, extraterritorial collection inverts tax competition and generates incentives for a race to the top—a logic that extends naturally to carbon pricing.
Speaker: Mathieu Parenti (Paris School of Economics)
Webpage: https://sites.google.com/site/mathieuparenti/home
When: Tuesday, June 09, 17.45-19.15 p.m..
Where: lecture hall 15, 2nd floor
Oskar-Morgenstern-Platz 1, 1090 Wien
The main entrance at Oskar-Morgenstern-Platz 1 is the easiest way to get to lecture hall 15, 2nd floor.
Registration:
Participants are requested to register in advance with Julia Hnidek (julia.hnidek@univie.ac.at).
The Vienna International Economics Seminar (VIES) is a joint initiative of CEU, FIW Research Centre International Economics, Universität Wien, WIFO, wiiw, and WU Vienna. The VIES seminar is dedicated to frontier research in international economics and features presentations by renowned international scholars.
The seminar is held at irregular intervals on Tuesdays from 17:45 to 19:15, alternating each semester between participating institutions. From October 2025 to January 2026, the seminar will be hosted by the University of Vienna.
Organizers:
Gábor Békés (CEU), Alejandro Cuñat (Vienna U.), Harald Fadinger (Vienna U.), Gabriel Felbermayr (WIFO, WU), Miklós Koren (CEU), Harald Oberhofer (WIFO, WU), Robert Stehrer (wiiw).
The seminar is currently coordinated by Harald Fadinger.
For more information and the detailed seminar schedule, please visit: https://sites.google.com/view/viennainternationaleconomicsse/
