“…ACE tax systems have been frequently introduced into the tax policy debate over the last few years (IMF 2011;IFA 2012;Shay et al 2015;EU 2016), including the Allowance for Growth and Investment (AGI) proposal by the EU Commission in 2016 (EU 2016) and the EU's DEBRA proposal in 2022. From a fiscal perspective, the adoption of an ACE tax system narrows the tax base of firms and thus generates less tax revenue than a classical corporate income tax system (Finke et al, 2014); however, such an adoption could lead to macroeconomic welfare gains. There exist multiple examples of countries that have adopted ACE tax systems, such as Austria, Belgium, Brazil, Croatia, Cyprus, Italy, Latvia, Portugal, and Turkey.…”