Tax competition in the EU: Why not to harmonize corporate income tax
|Author:||Mgr. Martin Salí|
|Year:||2007 - winter|
|Leaders:|| doc. Ing. Ondřej Schneider MPhil., Ph.D.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:|
|Abstract:||In this thesis, I propose to answer the question whether it is necessary to harmonize corporate taxes in the European Union. For this purpose, I carry out an analysis on the existence of corporate tax competition across the EU member states with regard to its leading determinants. I discuss theoretical concepts and conclusions of empirical studies carried out under this topic. By analyzing long-term benefits and costs of fiscal sovereignty of the EU member states in the field of corporate taxation, I come to the conclusion that the tax harmonization in the EU is not needful. I support this outcome with considerations about the net benefit of harmonization, its political enforceability, potential tax exporting effect and growing foreign share on capital, distinction between internal and external tax competition, possibilities of the budget stabilization, spontaneous corporate tax rate convergence and optimal tax structure.|