Corporate tax harmonization in the EU

Leon Bettendorf (), Albert van der Horst, Ruud de Mooij, Michael Devereux and Simon Loretz
Additional contact information
Leon Bettendorf: CPB Netherlands Bureau for Economic Policy Analysis

No 133, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: This paper explores the economic consequences of proposed EU reforms for a common consolidated corporate tax base. The reforms replace separate accounting with formula apportionment as a way to allocate corporate tax bases across countries. To assess the economic implications, we use a numerical CGE model for Europe. It encompasses several decision margins of firms,such as marginal investment, FDI decisions, and multinational profit shifting. The simulations suggest that consolidation does not yield substantial welfare gains for Europe. The variation of effects across countries is large and depends on the choice of the apportionment formula. Consolidation with formula apportionment does not weaken incentives for tax competition. Tax competition instead offers a rationale for rate harmonisation, in addition to base harmonisation.

JEL-codes: C68 F23 H25 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-acc, nep-cmp, nep-eur, nep-pbe and nep-pub
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.cpb.nl/sites/default/files/publicaties ... harmonization-eu.pdf (application/pdf)

Related works:
Journal Article: Corporate tax harmonization in the EU (2010)
Working Paper: Corporate tax harmonization in the EU (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:133

Access Statistics for this paper

More papers in CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis Contact information at EDIRC.
Bibliographic data for series maintained by ().