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Corporate Effective Tax Rates in an Enlarged European Union

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Author Info

  • Christina Elschner

    (University of Mannheim, Germany)

  • Werner Vanborren

    ()
    (European Commission)

Abstract

This paper offers an assessment of European corporate tax regimes using forward-looking indicators for corporate investment based on the Devereux-Griffith methodology. It draws on time series of average effective tax rates (EATR) using a detailed set of tax parameters for 27 EU Member States as well as some important non-EU countries. The analysis shows that over time the reduction in the corporate effective average tax rates (EATR) was lower than for the corporate statutory rates and the figures suggest that simple corporate tax base broadening by means of less generous capital allowances is not a sufficient explanation for this phenomenon. Finally, it is shown that the tax gap between the old and new EU Member States has grown over time and even accelerated after accession.

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File URL: http://ec.europa.eu/taxation_customs/resources/documents/taxation/gen_info/economic_analysis/tax_papers/taxation_paper_14_en.pdf
File Function: final version, 2009
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Bibliographic Info

Paper provided by Directorate General Taxation and Customs Union, European Commission in its series Taxation Papers with number 14.

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Length: 28 pages
Date of creation: Apr 2009
Date of revision: Apr 2009
Handle: RePEc:tax:taxpap:0014

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Web page: http://ec.europa.eu/taxation_customs/index_en.htm
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Related research

Keywords: European Union; effective tax rate; effective tax burden; corporate taxation; company taxation.;

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References

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  1. Andreas Haufler & Ian Wooton, . "Country Size and Tax Competition for Foreign Direct Investment," Working Papers 9702, Business School - Economics, University of Glasgow.
  2. Huizinga, Harry & Nicodeme, Gaetan, 2003. "Foreign Ownership and Corporate Income Taxation: An Empirical Evaluation," CEPR Discussion Papers 3952, C.E.P.R. Discussion Papers.
  3. Ulrich Schreiber & Christoph Spengel & Lothar Lammersen, 2002. "Measuring The Impact Of Taxation On Investment And Financing Decisions," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 54(1), pages 2-23, January.
  4. Nicodeme, Gaetan, 2001. "Computing effective corporate tax rates: comparisons and results," MPRA Paper 3808, University Library of Munich, Germany.
  5. Devereux, Michael P & Griffith, Rachel, 2002. "Evaluating Tax Policy for Location Decisions," CEPR Discussion Papers 3247, C.E.P.R. Discussion Papers.
  6. Johannes Becker & Clemens Fuest & Thomas Hemmelgarn, 2006. "Corporate Tax Reform and Foreign Direct Investment in Germany – Evidence from Firm-Level Data," CESifo Working Paper Series 1722, CESifo Group Munich.
  7. Bucovetsky, S., 1991. "Asymmetric tax competition," Journal of Urban Economics, Elsevier, vol. 30(2), pages 167-181, September.
  8. Wilson, J.D., 1990. "Tax Competition With Interregional Differences In Factor Endowments," Working Papers 4, John Deutsch Institute for the Study of Economic Policy.
  9. European Commission, 2001. "Company Taxation in the Internal Market," Taxation Studies 0005, Directorate General Taxation and Customs Union, European Commission.
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Citations

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Cited by:
  1. Elschner, Christina & Heckemeyer, Jost Henrich & Spengel, Christoph, 2009. "Besteuerungsprinzipien und effektive Unternehmenssteuerbelastungen in der Europäischen Union," ZEW Discussion Papers 09-034, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Burkhard Heer & Stefan Franz Schubert, 2011. "Unemployment and Debt Dynamics in a Highly Indebted Small Open Economy," CESifo Working Paper Series 3497, CESifo Group Munich.
  3. Christina Elschner & Jost H. Heckemeyer & Christoph Spengel, 2011. "Besteuerungsprinzipien und effektive Unternehmenssteuerbelastungen in der Europäischen Union: Regelt sich die EU‐weite Steuerharmonisierung von selbst?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(1), pages 47-71, 02.
  4. Callan, Tim & Savage, Michael, 2013. "Tax and Taxable Capacity: Ireland in Comparative Perspective," Research Notes RN2012/4/1, Economic and Social Research Institute (ESRI).
  5. Bernardi, Luigi, 2009. "Le tasse in Europa dagli anni novanta
    [Taxation in Europe since the Years 1990s]
    ," MPRA Paper 23441, University Library of Munich, Germany.
  6. Schubert, Stefan F., 2011. "The effects of total factor productivity and export shocks on a small open economy with unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1514-1530, September.
  7. repec:esr:wpaper:rn2012/4/1 is not listed on IDEAS
  8. Lourdes Jerez Barroso, 2011. "Base imponible y neutralidad del Impuesto de Sociedades: alternativas y experiencias," Hacienda Pública Española, IEF, vol. 197(2), pages 113-146, June.
  9. Keller, Sara & Schanz, Deborah, 2013. "Measuring tax attractiveness across countries," arqus Discussion Papers in Quantitative Tax Research 143, arqus - Arbeitskreis Quantitative Steuerlehre.

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