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Corporate tax harmonization in the European Union


  • Dankó, Zsófia


The recent financial and economic crisis of the European Union had exposed the necessity to complete monetary union with an economic union. One of the assets of a stronger economic integration is the harmonization of the tax systems (e.g. the corporate tax regimes) of the 27 Member States. Having this in mind, the European Commission proposed a common mechanism for the calculation of the corporate tax base, the consolidation of the tax bases incurred in the different Member States and the subsequent allocation of the consolidated tax base between the Member States effected (formulary apportionment) in 2011. The system envisaged by the European Commission is already introduced by the world highly integrated economies, like the United States of America and Canada on a domestic level, where the corporate tax base shall be also allocated between the states and the provinces based on the formulary apportionment method. This current article aims to present and compare the elements (factors) of the formulary apportionment method applied by the United States of America and Canada, and the elements of the allocation method proposed by the European Commission.

Suggested Citation

  • Dankó, Zsófia, 2012. "Corporate tax harmonization in the European Union," MPRA Paper 40350, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40350

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    References listed on IDEAS

    1. George Kopits, 1992. "Tax harmonization in the European Community; Policy Issues and Analysis," IMF Occasional Papers 94, International Monetary Fund.
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    More about this item


    tax harmonization; corporate tax; European Union;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • G01 - Financial Economics - - General - - - Financial Crises

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