Evaluating Neutrality Properties of Corporate Tax Reforms

Michael Devereux and Simon Loretz

No 1007, Working Papers from Oxford University Centre for Business Taxation

Abstract: We propose a methodology for assessing the neutrality of corporate tax reform proposals in an open economy. The methodology identifies variation in effective tax rates to assess the proximity of a tax system to capital export neutrality (CEN) and to market neutrality (MN, which holds if all potential competitors in a single market face the same effective tax rate). We apply the methodology to two reform options in the EU. Optional international loss consolidation would move the EU tax system away from both CEN and MN. The proposed common consolidated corporate tax base (CCCTB) has mixed effects which depend on the precise comparisons made.

Keywords: Corporate Taxation; International Loss Consolidation; Ap- portionment Rules; Common Consolidated Tax Base; Neutrality (search for similar items in EconPapers)
JEL-codes: H25 H87 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Citations: View citations in EconPapers (5)

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