Abstract

http://ssrn.com/abstract=1154455
 


 



The Dilemmas of Tax Coordination in the Enlarged European Union


Jens Brøchner


affiliation not provided to SSRN

Patrik Svensson


affiliation not provided to SSRN

Peter Birch Sørensen


affiliation not provided to SSRN


CESifo Economic Studies, Vol. 53, Issue 4, pp. 561-595, 2007

Abstract:     
This study evaluates the economic effects of corporate tax coordination in the enlarged European Union (EU) using a computable general equilibrium model. Our main findings are as follows: (i) Corporate tax coordination can yield modest aggregate welfare gains. The 2004 enlargement of the EU has increased the potential gains from tax harmonization, provided corporate tax rates and tax bases are harmonized at their unweighted averages. (ii) All scenarios for coordination leave some EU Member States as winners and others as losers. An agreement on tax coordination is therefore likely to require elaborate compensation mechanisms. (iii) The large and diverse country effects suggest that Enhanced Cooperation for a subset of the Member States may be the most likely route towards tax coordination. (iv) Identifying winners and losers from coordination for the purpose of a compensation mechanism may be problematic, since countries experiencing gains in GDP and welfare tend to lose tax revenues, and vice versa.

Keywords: Corporate tax harmonization, EU tax coordination

JEL Classification: H25, H73, H87

Accepted Paper Series


Not Available For Download

Date posted: July 2, 2008  

Suggested Citation

Brøchner, Jens and Svensson, Patrik and Sørensen, Peter Birch, The Dilemmas of Tax Coordination in the Enlarged European Union. CESifo Economic Studies, Vol. 53, Issue 4, pp. 561-595, 2007. Available at SSRN: http://ssrn.com/abstract=1154455 or http://dx.doi.org/ifm017

Contact Information

Jens Brøchner (Contact Author)
affiliation not provided to SSRN
Patrik Svensson
affiliation not provided to SSRN
Peter Birch Sørensen
affiliation not provided to SSRN
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