Accelerating Downhill: How the EU Shapes Corporate Tax Competition in the Single Market

Journal of Common Market Studies, Volume 49. Number 3. pp. 585–606, 2011

22 Pages Posted: 3 Sep 2014

See all articles by Philipp Genschel

Philipp Genschel

European University Institute

Achim Kemmerling

University of Erfurt - Willy Brandt School of Public Policy

Eric Seils

Hans Böckler Foundation

Date Written: September 2, 2011

Abstract

Tax competition in the European Union is shaped by four partly opposed institutional mechanisms. While market integration and enlargement increase competitive pressure, the tax co-ordination of the Council of Ministers and the tax jurisprudence of the European Court of Justice could potentially reduce it. The net effect is to accelerate tax competition. This article presents quantitative evidence to suggest that tax competition is stronger in the EU than in the rest of the world, and explores qualitatively why tax co-ordination and tax jurisprudence have failed to prevent a race to the bottom in tax rates.

Keywords: European Union, tax competition, tax harmonization

JEL Classification: F36, H25, K34

Suggested Citation

Genschel, Philipp and Kemmerling, Achim and Seils, Eric, Accelerating Downhill: How the EU Shapes Corporate Tax Competition in the Single Market (September 2, 2011). Journal of Common Market Studies, Volume 49. Number 3. pp. 585–606, 2011. Available at SSRN: https://ssrn.com/abstract=2490516

Philipp Genschel (Contact Author)

European University Institute ( email )

Villa Schifanoia
133 via Bocaccio
Firenze (Florence), Tuscany 50014
Italy
+39 055 4685 735 (Phone)

Achim Kemmerling

University of Erfurt - Willy Brandt School of Public Policy ( email )

Nordhäuser Str. 63
Erfurt, 99089
Germany

Eric Seils

Hans Böckler Foundation

Straße 39
Düsseldorf, 40476
Germany

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