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Taxes in the EU New Member States and the Location of Capital and Profit

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  • Michael P Devereux

    (Oxford University Centre for Business Taxation, IFS, CEPR and CESifo)

Abstract

This paper investigates taxes on corporate profit levied in the new member states of the European Union. Part A provides some background for analysing the current position of corporate taxes in the EU, paying particular attention to the position of the new member states. It has three sections. The first summarises the influences that taxes on profit can have on economic decisions. The second analyses the development of corporation taxes in the EU over the last ten years, making a comparison between the 15 countries who were members prior to 2005, and the 10 new member states joining in 2004. The third section speculates on future developments, summarising evidence on whether there has been significant tax competition, and if so, where it is likely to lead. Part B draws out some policy implications in the light of this evidence and in the light of recent proposals from the European Commission for a common consolidated tax base in the EU.

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Bibliographic Info

Paper provided by Oxford University Centre for Business Taxation in its series Working Papers with number 0703.

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Date of creation: 2007
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Handle: RePEc:btx:wpaper:0703

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  1. Ruud de Mooij & S. Ederveen, 2001. "Taxation and foreign direct investment; a synthesis of empirical research," CPB Discussion Paper 3, CPB Netherlands Bureau for Economic Policy Analysis.
  2. Devereux, Michael P & Lockwood, Ben & Redoano, Michela, 2002. "Do Countries Compete over Corporate Tax Rates?," CEPR Discussion Papers 3400, C.E.P.R. Discussion Papers.
  3. Seppo Kari & Ylä-Liedenpohja & Jouko, 2005. "Cost of Capital for Cross-border Investment: The Fallacy of Estonia as a Tax Haven," Discussion Papers 367, Government Institute for Economic Research Finland (VATT).
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  6. Rosanne Altshuler & Timothy J. Goodspeed, 2002. "Follow the Leader? Evidence on European and U.S. Tax Competition," Departmental Working Papers 200226, Rutgers University, Department of Economics.
  7. Bartelsman, Eric J & Beetsma, Roel, 2000. "Why Pay More? Corporate Tax Avoidance Through Transfer Pricing in OECD Countries," CEPR Discussion Papers 2543, C.E.P.R. Discussion Papers.
  8. Michael Devereux & Alexander Klemm, 2003. "Measuring taxes on income from capital: evidence from the UK," IFS Working Papers W03/03, Institute for Fiscal Studies.
  9. Michael Keen & John King, 2002. "The Croatian profit tax: an ACE in practice," Fiscal Studies, Institute for Fiscal Studies, vol. 23(3), pages 401-418, September.
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  12. Garrett, Geoffrey, 1995. "Capital mobility, trade, and the domestic politics of economic policy," International Organization, Cambridge University Press, vol. 49(04), pages 657-687, September.
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  14. Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 449-495, October.
  15. Grubert, Harry & Mutti, John, 1991. "Taxes, Tariffs and Transfer Pricing in Multinational Corporate Decision Making," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 285-93, May.
  16. Hines, James R. Jr., 1999. "Lessons from Behavioral Responses to International Taxation," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 305-22, June.
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Cited by:
  1. Marcin Piatkowski & Mariusz Jarmuzek, 2008. "Zero Corporate Income Tax in Moldova," IMF Working Papers 08/203, International Monetary Fund.
  2. Heinemann, Friedrich & Overesch, Michael & Rincke, Johannes, 2008. "Rate Cutting Tax Reforms and Corporate Tax Competition in Europe," ZEW Discussion Papers 08-028, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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