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Corporate tax consolidation and enhanced coorporation in the European Union

  • Leon Bettendorf

    ()

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Albert van der Horst

    ()

    (CPB Netherlands Bureau for Economic Policy Analysis)

  • Ruud A. de Mooij

    ()

    (Erasmus University Rotterdam, CPB, Tinbergen Institute, Oxford University Centre for Business Taxation, CESifo)

  • Hendrik Vrijburg

    ()

    (Erasmus University Rotterdam)

This article assesses the economic implications of the introduction of consolidation with formula apportionment in the European Union under alternative enhanced cooperation agreements. We fi?nd that the consolidation is likely to yield a small aggregate welfare gain in Europe, but that not all countries benefi?t. A coalition of winning countries reduces the welfare gain and may induce a process of adverse selection which distroys the possibility of cooperation. We fi?nd that a coalition of similar countries (in terms of the size of their multinational sector) is more feasible in achieving agreement and is actually preferred by those countries over a European-wide reform.

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Paper provided by Oxford University Centre for Business Taxation in its series Working Papers with number 1001.

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Date of creation: 2010
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Handle: RePEc:btx:wpaper:1001
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  5. Ruud de Mooij & Michael P. Devereux, 2009. "Alternative Systems of Business Tax in Europe: An applied analysis of ACE and CBIT Reforms," Taxation Studies 0028, Directorate General Taxation and Customs Union, European Commission.
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  19. Jens Brøchner & Jesper Jensen & Patrik Svensson & Peter Birch Sørensen, 2006. "The Dilemmas of Tax Coordination in the Enlarged European Union," CESifo Working Paper Series 1859, CESifo Group Munich.
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