Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/123719 
Authors: 
Year of Publication: 
2015
Series/Report no.: 
ZEW Discussion Papers No. 15-082
Publisher: 
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim
Abstract: 
Corporate tax levels have fallen substantially in Europe during the last decades. A broad literature has identified tax competition as one reason for this decline in corporate tax levels. However, none of these studies explicitly asks the question whether tax competition within regions is different from tax competition across regions, e.g. due to global regionalism of foreign direct investments. This is a crucial question to answer in order to discuss the desirability of tax harmonization in a distinct region, for example, within the European Union. Therefore, the study aims to give hints on the question whether the decline in corporate tax levels in Europe is mainly driven by tax competition between EU member states or by pressure from other world regions. The results of this study, which makes use of tax reaction functions, indicate that there is evidence for tax competition within Europe, whereas there is no robust evidence that European countries compete with countries from other world regions.
Subjects: 
corporate taxes
tax competition
tax harmonization
Europe
JEL: 
H2
H77
H87
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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