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Evaluating Neutrality Properties of Corporate Tax Reforms

Author

Listed:
  • Michael P. Devereux

    (Oxford University Centre for Business Taxation)

  • Simon Loretz

    (Oxford University Centre for Business Taxation)

Abstract

We propose a methodology for assessing the neutrality of corporate tax reform proposals in an open economy. The methodology identifies variation in effective tax rates to assess the proximity of a tax system to capital export neutrality (CEN) and to market neutrality (MN, which holds if all potential competitors in a single market face the same effective tax rate). We apply the methodology to two reform options in the EU. Optional international loss consolidation would move the EU tax system away from both CEN and MN. The proposed common consolidated corporate tax base (CCCTB) has mixed effects which depend on the precise comparisons made.

Suggested Citation

  • Michael P. Devereux & Simon Loretz, 2010. "Evaluating Neutrality Properties of Corporate Tax Reforms," Working Papers 1007, Oxford University Centre for Business Taxation.
    • Handle: RePEc:btx:wpaper:1007
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    File URL: http://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/Publications/Working_Papers/Series_10/WP1007.pdf
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    Cited by:

    1. Michael P. Devereux & Simon Loretz, 2012. "How Would EU Corporate Tax Reform Affect US Investment in Europe?," NBER Chapters, in: Tax Policy and the Economy, Volume 26, pages 59-91, National Bureau of Economic Research, Inc.
    2. Małecka-Ziembińska Edyta & Siwiec Anna, 2020. "Searching for similarities in EU corporate income taxes for their harmonization," Economics and Business Review, Sciendo, vol. 6(4), pages 72-94, December.

    More about this item

    Keywords

    Corporate Taxation; International Loss Consolidation; Ap- portionment Rules; Common Consolidated Tax Base; Neutrality;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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