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Implications of the introduction of the Common Consolidated Corporate Tax Base for tax revenues in Romania

Author

Listed:
  • Daniela Pirvu

    (University of Pitesti, Department of Economic Theory and Finances, Pitesti)

  • Logica Banica

    (University of Pitesti, Department of Accounting and Management of Computer, Pitesti)

  • Alina Hagiu

    (University of Pitesti, Department of Economic Theory and Finances, Pitesti)

Abstract

In order to address some existing difficulties in corporate income taxation (CIT), the European Commission proposed the introduction of measures for coordination, a solution contested by some member states but supported by most professionals and many organizations representing the interests of European employers. Disputes in connection with the introduction of the Common Consolidated Corporate Tax Base (CCCTB) are occasioned by the uncertainty regarding its effects. Since CIT makes an important contribution to the forming of central budget revenues, the CCCTB is a challenge for Romanian public authorities. The Romanian government has not made clear its options in this respect. In this paper we present the main points of view about the implications of introducing the CCCTB as seen by specialists and estimate the effects of the EU formula apportionment on CIT revenues in Romania. According to research results on a sample of companies in 2006-09, Romania will assume a loser position if the EU formula apportionment uses the payroll (although the loss of tax revenue would be lower than other researchers have estimated) and a winner position if the EU formula apportionment does not use the payroll.

Suggested Citation

  • Daniela Pirvu & Logica Banica & Alina Hagiu, 2011. "Implications of the introduction of the Common Consolidated Corporate Tax Base for tax revenues in Romania," Financial Theory and Practice, Institute of Public Finance, vol. 35(2), pages 197-215.
    • Handle: RePEc:ipf:finteo:v:35:y:2011:i:2:p:197-215
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    References listed on IDEAS

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    1. Copenhagen Economics, 2004. "Economic effects of tax cooperation in an enlarged European Union," Taxation Studies 0012, Directorate General Taxation and Customs Union, European Commission.
    2. Michael P. Devereux & Simon Loretz, 2008. "The Effects of EU Formula Apportionment on Corporate Tax Revenues," Fiscal Studies, Institute for Fiscal Studies, vol. 29(1), pages 1-33, March.
    3. Fuest, Clemens & Hemmelgarn, Thomas & Ramb, Fred, 2006. "How would formula apportionment in the EU affect the distribution and the size of the corporate tax base? An analysis based on German multinationals," Discussion Paper Series 1: Economic Studies 2006,20, Deutsche Bundesbank.
    4. Michael P Devereux & Simon Loretz, 2008. "Increased efficiency through consolidation and formula apportionment in the European Union?," Working Papers 0812, Oxford University Centre for Business Taxation.
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    Cited by:

    1. Nicoleta MIHAILA, 2018. "About Common Consolidated Corporate Tax Base And Its Possible Effects On Eu Member States," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 3(4), pages 104-113.

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