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Corporate Income Tax Reform in the EU

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  • Álvarez-Martínez, María Teresa
  • Barrios, Salvador
  • Gesualdo, Maria
  • Pontikakis, Dimitrios
  • Pycroft, Jonathan

Abstract

Using CORTAX, a computable general equilibrium (CGE) model designed to assess the economic impact of corporate taxation, we examine the possible economic impacts of uncoordinated and coordinated changes in national corporate tax rates among a group of economies (the EU) that are tightly associated through international trade and investment. The aim is to contribute to the ongoing debate about the desirability, modality and likely impact of alternative policy solutions to the challenges posed by tax competition and aggressive tax planning. Corporate income tax rates can generate substantial responses within the implementing country as well as beyond its own borders. Harmonisation of CIT rates would likely involve winners and losers, and as such, may be best pursued gradually and as part of a broader package of corporate tax reform.

Suggested Citation

  • Álvarez-Martínez, María Teresa & Barrios, Salvador & Gesualdo, Maria & Pontikakis, Dimitrios & Pycroft, Jonathan, 2016. "Corporate Income Tax Reform in the EU," Conference papers 332694, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332694
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    File URL: https://ageconsearch.umn.edu/record/332694/files/8244.pdf
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    1. Leon Bettendorf & Albert van der Horst, 2006. "Documentation of CORTAX," CPB Memorandum 161, CPB Netherlands Bureau for Economic Policy Analysis.
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    Cited by:

    1. Diego d’Andria & Dimitrios Pontikakis & Agnieszka Skonieczna, 2018. "Towards a European R&D incentive? An assessment of R&D provisions under a common corporate tax base," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(5-6), pages 531-550, August.

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