Effects of Corporate Income Tax Harmonization/Coordination in the European Union

Abstract

In order to assess the effects of introducing corporate income tax harmonization/coordination within the European Union (EU), numerous studies and tests have been conducted by independent experts and specialized services of the European Commission or at its request. The attention of experts has mainly turned to estimates of the economic impact of corporate income tax harmonization/coordination (change in GDP, welfare and tax revenues), but other aspects have not been neglected, including tax compliance costs and location decisions for foreign direct investment (FDI). Since it seems unlikely that the member states will unanimously agree to corporate income tax harmonization/coordination within the EU, this chapter is intended to give readers a basic understanding of the adopting of harmonized corporate income tax regulations via enhanced cooperation.