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Company-Tax Coordination cum Tax-Rate Competition in the European Union

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  • Wolfgang Eggert
  • Andreas Haufler

Abstract

This paper reviews the recent theoretical literature that analyzes the European Union's policy to eliminate preferential corporate-tax regimes and the proposal to introduce a consolidated EU tax base with formula apportionment for the taxation of multinational firms. Since neither proposal includes a harmonization of corporate-tax rates, a core issue is how tax competition between member states will be affected by these partial coordination measures. The conclusions from our review are supportive of the EU's ban on preferential tax regimes, but the economic incentive effects of a switch to formula apportionment are found to be ambiguous.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

Volume (Year): 62 (2006)
Issue (Month): 4 (December)
Pages: 579-601

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Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200612)62:4_579:ccctci_2.0.tx_2-5

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Keywords: corporate taxation; tax coordination; multinational firms;

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References

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Citations

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Cited by:
  1. Haufler, Andreas, 2006. "Die Besteuerung multinationaler Unternehmen," Discussion Papers in Economics 1153, University of Munich, Department of Economics.
  2. Koffie Ben Nassar, 2008. "Corporate Income Tax Competition in the Caribbean," IMF Working Papers 08/77, International Monetary Fund.
  3. Egger, Peter & Eggert, Wolfgang & Keuschnigg, Christian & Winner, Hannes, 2010. "Corporate taxation, debt financing and foreign-plant ownership," European Economic Review, Elsevier, vol. 54(1), pages 96-107, January.
  4. Peter Egger & Wolfgang Eggert & Hannes Winner, 2007. "Saving Taxes Through Foreign Plant Ownership," CESifo Working Paper Series 1887, CESifo Group Munich.
  5. Alfons Weichenrieder, 2009. "Profit shifting in the EU: evidence from Germany," International Tax and Public Finance, Springer, vol. 16(3), pages 281-297, June.
  6. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," EPRU Working Paper Series 06-06, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  7. Marcin Piatkowski & Mariusz Jarmuzek, 2008. "Zero Corporate Income Tax in Moldova," IMF Working Papers 08/203, International Monetary Fund.
  8. Nadine Riedel, 2011. "Taxing multinationals under union wage bargaining," Working Papers 1106, Oxford University Centre for Business Taxation.
  9. Liliana Donath & Mariana Slavin, 2009. "Tax competition and foreign direct investments. Is there a connection?," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 56, pages 117-132, November.
  10. Narcis Eduard MITU, 2008. "Direct Taxation - Directions of Harmonization," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 3(36), pages 1407-1411, May.
  11. C. Dembour, 2008. "Competition for Business Location: A Survey," Journal of Industry, Competition and Trade, Springer, vol. 8(2), pages 89-111, June.
  12. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," CESifo Working Paper Series 1793, CESifo Group Munich.

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