Company Taxation in the European Union

Dorota Wawrzyniak

doi:10.2478/v10103-011-0022-2

Authors

Dorota Wawrzyniak University of Łódź

DOI:

https://doi.org/10.2478/v10103-011-0022-2

Abstract

This paper investigates different measures of corporate tax burden ranging from the most basic ones such as the statutory tax rate to the effective tax rates. Each of these measures has advantages and disadvantages and they may lead to different rankings of countries. One of the reasons lies the fact that they measure different things. The comparison of the statutory tax rates to the effective ones for the EU-27 during the period of 1998-2009 sometimes reveals very significant differences between these indicators. Taking this into consideration, the paper suggests that corporate tax burden analysis should not be limited to the most basic and readily available measure in the form of the statutory tax rate. Different measures are tailored to answer different research questions. Moreover, the article presents changes of company taxation for the EU-27 within 1998-2009.

Downloads

Download data is not yet available.

References

Becker J., Fuest C. (2004), A Backward Looking Measure of the Effective Marginal Tax Burden on Investment, CESifo Working Paper No. 1342
Google Scholar

Bellak C., Leibrecht M. (2007), Corporate Income Tax Competition and the Scope for National Tax Policy in the Enlarged Europe, [in:] Andersson K., Eberhartinger E., Oxelheim L. (ed.) National Tax Policy in Europe. To Be or Not to Be?, Springer, Berlin/Heidelberg
Google Scholar

Bellak C., Leibrecht M., Römisch R. (2005), FDI and Taxation: Some Methodological Aspects and New Evidence for Central and Eastern European Countries (CEE-NMS), [in:] Capital Taxation after EU Enlargement, Workshops Proceedings of OeNb Workshops
Google Scholar

Blechová B., Barteczková I. (2008), Comparison of the Methodologies for Assessing Effective Tax Burden of Corporate Income Used in European Union, MPRA Paper No. 17822
Google Scholar

Briotti M. G. (2003), Capital Income Taxation Under Convergence and EMU – A Framework to Discuss Policy Challenges in a World of High Capital Mobility, Research Department Public Finance Workshop ‘Tax Policy’, Banca d’Italia
Google Scholar

Devereux M. P. (2003), Measuring Taxes on Income from Capital, IFS Working Paper No. WP03/04
Google Scholar

Devereux M. P., Griffith R. (1999), The Taxation of Discrete Investment Choices – Revision 2, IFS Working Paper Series No. W98/16
Google Scholar

Devereux M. P., Griffith R. (2003), Evaluating Tax Policy for Location Decisions, ‘International Tax and Public Finance’, vol. 10 no. 2
Google Scholar

Devereux M. P., Griffith R., Klemm A. (2002), Corporate Income Tax Reforms and International Tax Competition, ‘Economic Policy’, vol. 17 no. 35
Google Scholar

Devereux M. P., Elschner Ch., Endres D., Spengel Ch. (2009), Effective Tax Levels Using the Devereux/Griffith Methodology, European Commission, Mannheim and Oxford
Google Scholar

Diamond J. W. (2008), Taxing Capital Income (Book Review), ‘National Tax Journal’, June 2008
Google Scholar

Ederveen S., de Mooij R. (2003), To Which Tax Rate Does Investment Respond? A Synthesis of Empirical Research on Taxation and Foreign Direct Investment, Research Department Public Finance Workshop ‘Tax Policy’, Banca d’Italia
Google Scholar

European Commission (2001), Company Taxation in the Internal Market, Commission Staff Working Paper, COM(2001) 582 final
Google Scholar

European Commission (2006), Structures of the Taxation Systems in the European Union: 1995-2004
Google Scholar

European Commission/Eurostat (2010), Taxation Trends in the European Union
Google Scholar

Giannini S., Maggiulli C. (2001), The Effective Tax Rates in the EU Commission Study on Corporate Taxation: Methodological Aspects, Main Results and Policy Implications, Paperprepared for the Conference ‘Corporate and Capital Income Taxation in the European Union’ Mons, 7-8-th December 2001
Google Scholar

Gordon R., Kalambokidis L., Slemrod J. (2003), A New Summary Measure of the Effective Tax Rate on Investment, NBER Working Paper No. 9535
Google Scholar

Gravelle J. G. (2007), Comment, [in:] Aaron H. J., Burman L. E., Steuerle C. E. (ed.)Taxing Capital Income, The Urban Institute Press, Washington
Google Scholar

Hajkova D. Nicoletti G., Vartia L., Yoo K.-Y. (2006), Taxation, Business Environment and FDI Location in OECD Countries, OECD Economics Department Working Papers No. 502
Google Scholar

Jacobs O.H., Spengel C. (1999), The Effective Average Tax Burden in the European Union and the USA. A Computer-based Calculation and Comparison with the Model of the European Tax Analyzer, Centre for European Economic Research (ZEW) and the University of Mannheim, ZEW Discussion Paper No. 99-54
Google Scholar

King M. A., Fullerton D. (1984), The Taxation of Income from Capital: A Comparative Study of the United States, the United Kingdom, Sweden, and West Germany, The University of Chicago Press, Chicago London
Google Scholar

Klemm A. (2008), Effective Average Tax Rates for Permanent Investment, IMF Working Paper No. WP/08/56
Google Scholar

Lammersen L. (2002), The Measurement of Effective Tax Rates: Common Themes in Business Management and Economics, ZEW Discussion Paper No. 02-46
Google Scholar

Leibrecht M., Römisch R. (2002), Comparison of Tax Burdens, WIIW Research Report No. 292
Google Scholar

Mendoza E. G., Razin A., Tesar L. L. (1994), Effective Tax Rates in Macroeconomics: Cross-Country Estimates of Tax Rates on Factor Incomes and Consumption, NBER Working Paper No. 4864
Google Scholar

Nicodème G. (2001), Computing Effective Corporate Tax Rates: Comparison and Results, MPRA Paper No. 3808
Google Scholar

OECD (2001), Tax Ratios: A Critical Survey, OECD Tax Policy Studies No. 5
Google Scholar

OECD (1991), Taxing Profits in a Global Economy: Domestic and International Issues, OECD, Paris
Google Scholar

OECD (2000), Tax Burdens Alternative Measures, OECD Tax Policy Studies No. 2
Google Scholar

Slemrod J. (2007), Does the United States Tax Capital Income?, [in:] Aaron H. J., Burman L. E., Steuerle C. E. (ed.) Taxing Capital Income, The Urban Institute Press, Washington
Google Scholar

Yoo K.-Y. (2003), Corporate Taxation of Foreign Direct Investment Income 1991-2001, OECD Economic Department Working Paper No. 365
Google Scholar