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The authors test econometrically for the existence of tax interactions among Belgium’s local authorities (communes) for two types of taxes, the local component of personal income tax (additionnels à l’impôt sur le revenu des personnes physiques, IPP) and the property tax (précompte immobilier, PRI). A dynamic model is specified and estimated on the basis of panel data from the country’s 589 communes over a 15-year period. The results show a definite interaction among the communes in setting the rates of the two taxes. Further, their adjustments to changes in rates in other communes are slow: the gap between the actual rate and the rate desired because of the interactions is reduced annually by only 6% for the PRI and only 10% for the IPP.