Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/198772
Authors: 
Nicodeme, Gaetan
Caiumi, Antonella
Majewski, Ina
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7412
Abstract: 
Despite sharp reductions in corporate income tax (CIT) rates worldwide, CIT revenues have not fallen dramatically in the last two decades. This paper investigates the recent developments in CIT in the European Union, by taking a closer look at the potential driving forces behind this puzzle. Using a unique dataset of national sectoral accounts, we decompose the CIT revenue to GDP ratio for the EU and find that while the decrease in the statutory rates has driven down tax collection, the effect was more than offset by a broadening of the taxable base and a slight increase in the size of the corporate sector. However, this result holds for the period 1995-2015 but not for the last decade where base broadening has not been able to match further cuts in rates.
Subjects: 
corporate tax
implicit tax rate
tax reforms
incorporation
European Union
JEL: 
E62
H25
O52
Document Type: 
Working Paper

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