Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/54980 
Year of Publication: 
2012
Series/Report no.: 
ZEW Discussion Papers No. 12-003
Publisher: 
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim
Abstract: 
We trace back Romania's development to a low-tax country among the Member States of the European Union by analysing the major tax law changes in corporate taxation since 1992. We find that the significant reduction of the corporate income tax rate from 45% in 1992 to 16% since 2005 has not been accompanied by a comprehensive broadening of the corporate income tax base as prevalent in many longstanding Member States of the EU and the OECD. Our analysis is not limited to a comprehensive description of the development of corporate taxation in Romania, but goes on with a numerical analysis of the tax burdens at different periods of time which constitute milestones in the development of corporate taxation in Romania. For this purpose, we apply the European Tax Analyzer, which is a computer-based model firm approach. We find that the average company tax burden of the underlying model company has dropped significantly by almost 65% since 1992. Furthermore, our numerical analysis does not confirm the tax base broadening policy. As a result, Romania holds position two among the group of Central and Eastern European EU Member States.
Subjects: 
corporate taxation
effective tax burden
transition economy
EU accession countries
tax reform
tax-rate-cum-base-broadening reform
JEL: 
H22
H25
O38
Document Type: 
Working Paper

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