Corporate tax rates in the EU: harmonisation and competition from the perspective of convergence analyses

Tax policy plays a key role in shaping the economic environment and the competitiveness of states within the common European market. Given the deepening economic integration within the EU, analysing tax system convergence is becoming increasingly important. This paper aims to analyse the development of tax rates in European Union countries, focusing on identifying long-term trends and assessing the degree of their convergence. The empirical part of the paper focuses on examining whether corporate tax rates are converging within the European Union, based on two analytical perspectives – Beta convergence and Sigma convergence. Regression analysis was used to test the hypothesis that member states with higher initial tax rates experienced a faster rate of reduction during the period 2013–2023 (Beta convergence). At the same time, the variability of tax rates among countries was examined using a trend analysis of the standard deviation to determine whether differences between countries are decreasing over time (Sigma convergence). The results of this study confirmed the existence of convergence in corporate tax rates within the European Union. Based on both Beta and Sigma convergence analyses, it can be concluded that differences between EU member states are gradually decreasing, indicating a partial trend toward harmonisation of tax policies in EU countries.