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Estonian corporate tax: Lessons for Poland

Dmitri Jegorov, Anna Leszczyłowska and Aleksander Łożykowski

No 163, mBank - CASE Seminar Proceedings from CASE-Center for Social and Economic Research

Abstract: Estonia has Europe’s most transparent tax system (while Poland is second-to-last, in 35th place), and is also known for its pioneering approach to taxation of legal persons’ income. Since 2000, payers of Estonian corporate tax don’t pay tax on their profits as long as they don’t realize them. In principle, this approach should make access to capital easier, spark investment by companies and contribute to faster economic growth. Are these and other positive effects really noticeable in Estonia? Have other countries followed in this country’s footsteps? Would deferment of income tax be possible and beneficial for Poland? How would this affect revenue from tax on corporate profits? Would investors come to see Poland as a tax haven? Does the Estonian system limit tax avoidance and evasion, or actually the opposite? Is such a system fair? Are intermediate solutions possible, which would combine the strengths or limit the weaknesses of the classical and Estonian models of profit tax?

Keywords: corporate income tax; distributed profit tax; dividend tax; cash flow tax; Estonia (search for similar items in EconPapers)
JEL-codes: H25 H32 M48 (search for similar items in EconPapers)
Pages: 53
Date: 2020-04-09
New Economics Papers: this item is included in nep-acc, nep-cis, nep-pbe, nep-pub and nep-tra
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