Corporate Tax Consolidation and Enhanced Cooperation in the European Union

Bettendorf, Leon, van der Horst, Albert, de Mooij, Ruud and Vrijburg, Hendrik (2010) Corporate Tax Consolidation and Enhanced Cooperation in the European Union. Centre for Business Taxation WP 10/01.

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This article assesses the economic implications of the introduction of consolidation with formula apportionment in the European Union under alternative enhanced cooperation agreements. We find that the consolidation is likely to yield a small aggregate welfare gain in Europe, but that not all countries benefit. A coalition of winning countries reduces the welfare gain and may induce a process of adverse selection which distroys the possibility of cooperation. We find that a coalition of similar countries (in terms of the size of their multinational sector) is more feasible in achieving agreement and is actually preferred by those countries over a European-wide reform.

Item Type: Other Working Paper
Keywords: Corporate Tax Harmonisation; Common Consolidated Corporate Tax Base; Applied General Equilibrium; European Union.
Centre: Oxford University Centre for Business Taxation > CBT Working Papers
Date Deposited: 12 Dec 2012 14:13
Last Modified: 15 Oct 2015 02:18

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