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- Title
Corporation taxes in the European Union: Slowly moving toward comprehensive business income taxation?
- Authors
Cnossen, Sijbren
- Abstract
This paper surveys and evaluates the corporation tax 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, interest and royalties; 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 strategy of strengthening source-based taxation and narrowing differences in tax rates. The strategy starts with dual income taxation, proceeds with final source withholding taxes and rate coordination, and is made complete by comprehensive business income taxation. Common base and cash flow taxation are not favored.
- Subjects
CORPORATE taxes; BUSINESS tax; RENT (Economic theory); CORPORATE profits; EXTERNALITIES; SUBSIDIARY corporations
- Publication
International Tax & Public Finance, 2018, Vol 25, Issue 3, p808
- ISSN
0927-5940
- Publication type
Article
- DOI
10.1007/s10797-017-9471-2