Corporate Effective Tax Rates in an Enlarged European Union

Christina Elschner and Werner Vanborren
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Christina Elschner: University of Mannheim, Germany

No 14, Taxation Papers from Directorate General Taxation and Customs Union, European Commission

Abstract: This paper offers an assessment of European corporate tax regimes using forward-looking indicators for corporate investment based on the Devereux-Griffith methodology. It draws on time series of average effective tax rates (EATR) using a detailed set of tax parameters for 27 EU Member States as well as some important non-EU countries. The analysis shows that over time the reduction in the corporate effective average tax rates (EATR) was lower than for the corporate statutory rates and the figures suggest that simple corporate tax base broadening by means of less generous capital allowances is not a sufficient explanation for this phenomenon. Finally, it is shown that the tax gap between the old and new EU Member States has grown over time and even accelerated after accession.

Keywords: European Union; effective tax rate; effective tax burden; corporate taxation; company taxation. (search for similar items in EconPapers)
JEL-codes: H25 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-04, Revised 2009-04
New Economics Papers: this item is included in nep-eec, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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