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Corporate Income Tax and Economic Distortions

  • Gaetan Nicodeme

    ()

    (European Commission)

As any non-lump-sum tax, corporate income taxation creates distortions in economic choices, reducing its efficiency. This paper reviews some of these domestic and international distortions and their most recent estimates from the economic literature. Distortions originating from income shifting between capital and labour sources, profit shifting across jurisdictions, the effects of taxation on business location and foreign direct investment are the major sources of distortions.

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File URL: http://ec.europa.eu/taxation_customs/resources/documents/taxation/gen_info/economic_analysis/tax_papers/taxation_paper_15_en.pdf
File Function: final version, 2009
Download Restriction: no

Paper provided by Directorate General Taxation and Customs Union, European Commission in its series Taxation Papers with number 15.

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Length: 19 pages
Date of creation: Apr 2009
Publication status: Published in Bulletin de Documentation du SPF Finances, 68(3): 91-106.
Handle: RePEc:tax:taxpap:0015
Contact details of provider: Web page: http://ec.europa.eu/taxation_customs/index_en.htm

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