Romania's development to a low-tax country: Effective corporate tax burden in Romania from 1992 to 2010 and Romania's current ranking among the eastern European member states
AbstractWe trace back Romania's development to a low-tax country among the Member States of the European Union by analysing the major tax law changes in corporate taxation since 1992. We find that the significant reduction of the corporate income tax rate from 45% in 1992 to 16% since 2005 has not been accompanied by a comprehensive broadening of the corporate income tax base as prevalent in many longstanding Member States of the EU and the OECD. Our analysis is not limited to a comprehensive description of the development of corporate taxation in Romania, but goes on with a numerical analysis of the tax burdens at different periods of time which constitute milestones in the development of corporate taxation in Romania. For this purpose, we apply the European Tax Analyzer, which is a computer-based model firm approach. We find that the average company tax burden of the underlying model company has dropped significantly by almost 65% since 1992. Furthermore, our numerical analysis does not confirm the tax base broadening policy. As a result, Romania holds position two among the group of Central and Eastern European EU Member States. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 12-003.
Date of creation: 2012
Date of revision:
corporate taxation; effective tax burden; transition economy; EU accession countries; tax reform; tax-rate-cum-base-broadening reform;
Find related papers by JEL classification:
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-02-20 (Accounting & Auditing)
- NEP-ALL-2012-02-20 (All new papers)
- NEP-TRA-2012-02-20 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002.
"Corporate income tax reforms and international tax competition,"
CEPR & CES & MSH, vol. 17(35), pages 449-495, October.
- Deveraux, M. & Griffith, R & Klemm, A., 2002. "Corporate income tax reforms and international tax competition," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Finke, Katharina & Heckemeyer, Jost Henrich & Reister, Timo & Spengel, Christoph, 2010.
"Impact of tax rate cut cum base broadening reforms on heterogeneous firms: Learning from the German tax reform 2008,"
ZEW Discussion Papers
10-036, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Finke, Katharina & Heckemeyer, Jost H. & Reister, Timo & Spengel, Christoph, 2011. "Impact of tax rate cut cum base broadening reforms on heterogeneous firms: Learning from the German tax reform 2008," ZEW Discussion Papers 10-036 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Katharina Finke & Jost H. Heckemeyer & Timo Reister & Christoph Spengel, 2010. "Impact of Tax Rate Cut Cum Base Broadening Reforms on Heterogeneous Firms – Learning from the German Tax Reform 2008," Working Papers 1005, Oxford University Centre for Business Taxation.
- Lars P. Feld & Jost H. Heckemeyer, 2011.
"Fdi And Taxation: A Meta‐Study,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 25(2), pages 233-272, 04.
- Lars P. Feld & Jost Henrich Heckemeyer, 2009. "FDI and Taxation: A Meta-Study," CESifo Working Paper Series 2540, CESifo Group Munich.
- Feld, Lars P. & Heckemeyer, Jost Henrich, 2008. "FDI and Taxation: A Meta-Study," ZEW Discussion Papers 08-128, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Simon Loretz, 2008.
"Corporate taxation in the OECD in a wider context,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 24(4), pages 639-660, winter.
- Michael P. Devereux, 2008. "Business taxation in a globalized world," Oxford Review of Economic Policy, Oxford University Press, vol. 24(4), pages 625-638, winter.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.