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AbstractWithin the EU Regulatory Framework, licensees for commercial radio broadcasting may be charged a fee to ensure optimal allocation of scarce resources but not to maximize public revenues. In this paper, it is described how such a fee can be determined for the purpose of licence renewal or extension. In the case at hand, national and regional Dutch FM licences were valued, taking into account that simulcast broadcasting of digital and analogue radio will be obligatory upon extension. The GLS and distribution cost models per cash flow variable, discounted to 2011, result in a value per licence based on objective licence characteristics. These values can be used to set licence fees if administrative renewal or extension is opted for instead of a new auction or beauty contest. Although such a model-based valuation creates stability for listeners and broadcasters as compared to an auction which has more uncertain market outcomes, it is inevitable that fees based on econometric analysis and market forecasts will be scrutinized by licensees and may be subject to legal procedures.While radio licence renewal occurs in many EU countries, an objective, model-based approach for setting licence fees has not been used so far. Yet, it is argued that such an approach, taking an averagely efficient entrant as a starting point, is most in line with the EU Regulatory Framework.
The goal of this paper is to define and quantitatively measure tax avoidance. So far any rigorous assessment of financial flows related to tax avoidance that entails paying (almost) no taxes, is lacking. This prevents a proper assessment of the necessity for further regulation to fight such undesirable tax avoidance. Quantifying tax avoidance provides a sound starting point for assessing the severity of regulation – matching the expected benefits with costs – and sheds further light on the possible design of effective regulation. The paper defines tax avoidance as the legal use of tax constructions aimed at paying (almost) no taxes in the entire international financial chain. Our paper shows that in order to prevent international tax systems from being used for such double non-taxation, governments could introduce a withholding tax on outgoing interest and royalty flows to low tax jurisdictions (tax havens). If the low tax threshold is set at 15% or 10% respectively, then depending on the choice for one of the two provided definitions of ‘low tax jurisdiction’, we find that the combined outgoing royalty and interest flow related to tax avoidance via Dutch conduit companies was on average 9.7 or 11.9 billion euro per year in the period 2009-2013.
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