Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130424
Authors: 
Cnossen, Sijbren
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 5790
Abstract: 
This paper surveys and evaluates the corporation tax (CT) systems of the Member States of the European Union on the basis of a comprehensive taxonomy of actual and potential regimes, which have as their base either profits, profits and interest, or economic rents. The current regimes give rise to various instate and interstate spillovers, which violate the basic tenets – neutrality and subsidiarity – of the single market. The trade-offs between the implications of these tenets – harmonization and diversity, respectively – can be reconciled by a bottom-up, reversible strategy of strengthening source-based taxation and approximating tax rates. The strategy starts with dual income taxation, proceeds with final source withholding taxes and rate approximation, and is made complete by comprehensive business income taxation. Common base taxation, if desired, should probably be left to the Member States themselves.
Subjects: 
corporation tax
European Union
tax coordination
tax spillovers
dual income tax
comprehensive business income tax
allowance for corporate equity
rate of return allowance
JEL: 
H25
H32
H71
H73
H77
Document Type: 
Working Paper

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