The Development of Corporate Tax Systems in the European Union from 1998 to 2017: Qualitative and Quantitative Analysis

Abstract

The process of economic integration and associated legislative acts, competitive pressures as well as the consequences of the financial and sovereign debt crisis have considerably shaped Member States’ tax systems during the last two decades. Our article combines a qualitative and quantitative analysis of the development of European tax systems based on a unique and comprehensive dataset for the EU-25 Member States between 1998 and 2017. Especially among the EU-15 Member States, we still find evidence for the often-cited trend of tax rate cut cum tax base broadening. In this context, we identify interest deduction limitation rules and limitations to loss offset as main drivers of tax base broadening. These mechanisms possibly reinforce the risk of economic substance taxation in crisis or loss situations. Furthermore, Member States increasingly rely on the enhanced taxation of dividends at shareholder level to prevent potential revenue losses from lower corporate income tax rates.

The Tax Attractiveness of EU Locations for Corporate Investments: A Stocktaking of Past Developments and Recent Reforms

“…A simple comparison of statutory corporate income tax rates to assess the tax attractiveness of investment locations would not give the whole picture, as reductions of corporate income tax rates are often accompanied by changes in the tax base (Bräutigam et al 2019). Therefore, we rely on the Mannheim Tax Index 7 to analyse the tax attractiveness of the EU Member States for the manufacturing sector.…”

“…This induced a dynamic of tax rate cuts also within larger economies (Elschner et al 2011). These tax rate cuts often came along with tax base broadening reforms (Bräutigam et al 2019). In the aftermath of the economic and financial crisis in 2008/2009, the trend of cutting tax rates stalled for some years.…”

Analysis of the Effectiveness of the Voluntary Disclosure Program on Taxpayer Compliance at the Koja Pratama Tax Service Office in 2022

“…This study uses the method of qualitative method (Boyd & Ashley, 2006;Bräutigam et al, 2019). According to Miles & Huberman (1992:16), analysis consists of three concurrent activities: data reduction, data presentation, and drawing conclusions/verification.…”