Corporate tax consolidation and enhanced cooperation in the European Union

Leon Bettendorf (), Albert van der Horst, Ruud de Mooij and Hendrik Vrijburg
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Leon Bettendorf: CPB Netherlands Bureau for Economic Policy Analysis

No 132, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: This article assesses the economic implications of the introduction of consolidation with formula apportionment in the European Union under alternative enhanced cooperation agreements. We find that the consolidation is likely to yield a small aggregate welfare gain in Europe, but that not all countries benefit. A coalition of winning countries reduces the welfare gain and may induce a process of adverse selection that reduces the number of participating countries. We find 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.

JEL-codes: C68 F23 H25 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-acc and nep-eur
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:132

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