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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 analyses the European Union’spolicy to eliminate preferential corporate tax regimes and the proposal to introduce aconsolidated EU tax base with formula apportionment for the taxation of multinationalfirms. Since neither proposal includes a harmonisation of corporate tax rates, a coreissue is how tax competition between member states will be affected by these partialcoordination measures. The conclusions from our review are supportive of the EU’s banon preferential tax regimes, but the economic incentive effects of a switch to formulaapportionment are found to be ambiguous.

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Bibliographic Info

Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Papers No. 28.

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Date of creation: 2006
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Handle: RePEc:ces:ifowps:_28

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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. Koffie Ben Nassar, 2008. "Corporate Income Tax Competition in the Caribbean," IMF Working Papers, International Monetary Fund 08/77, International Monetary Fund.
  2. Marcin Piatkowski & Mariusz Jarmuzek, 2008. "Zero Corporate Income Tax in Moldova," IMF Working Papers, International Monetary Fund 08/203, 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, Elsevier, vol. 54(1), pages 96-107, January.
  4. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," CESifo Working Paper Series 1793, CESifo Group Munich.
  5. Alfons Weichenrieder, 2009. "Profit shifting in the EU: evidence from Germany," International Tax and Public Finance, Springer, Springer, vol. 16(3), pages 281-297, June.
  6. Peter Egger & Wolfgang Eggert & Hannes Winner, 2007. "Saving Taxes Through Foreign Plant Ownership," CESifo Working Paper Series 1887, CESifo Group Munich.
  7. Nadine Riedel, 2011. "Taxing multi-nationals under union wage bargaining," International Tax and Public Finance, Springer, Springer, vol. 18(4), pages 399-421, August.
  8. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," EPRU Working Paper Series, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics 06-06, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  9. Haufler, Andreas, 2006. "Die Besteuerung multinationaler Unternehmen," Discussion Papers in Economics, University of Munich, Department of Economics 1153, University of Munich, Department of Economics.
  10. 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, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 56, pages 117-132, November.
  11. 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, University of Craiova, Faculty of Economics and Business Administration, vol. 3(36), pages 1407-1411, May.
  12. C. Dembour, 2008. "Competition for Business Location: A Survey," Journal of Industry, Competition and Trade, Springer, Springer, vol. 8(2), pages 89-111, June.

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