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Company Tax Coordination cum Tax Rate Competition in the European Union

  • Wolfgang Eggert
  • Andreas Haufler

This paper reviews the recent theoretical literature that analyses the European Union’spolicy to eliminate preferential corporate tax regimes and the proposal to introduce aconsolidated EU tax base with formula apportionment for the taxation of multinationalfirms. Since neither proposal includes a harmonisation of corporate tax rates, a coreissue is how tax competition between member states will be affected by these partialcoordination measures. The conclusions from our review are supportive of the EU’s banon preferential tax regimes, but the economic incentive effects of a switch to formulaapportionment are found to be ambiguous.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-Ifo_Working_Papers/wp-ifo-2005-2010/IfoWorkingPaper-28.pdf
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Paper provided by Ifo Institute - Leibniz Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Papers No. 28.

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Date of creation: 2006
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Handle: RePEc:ces:ifowps:_28
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