Effective Tax Burden in Europe: Current Situation, Past Developments and Simulations of Reforms

ISBN-13: 9783790814705 / Angielski / Miękka / 2002 / 131 str.

O. H. Jacobs; C. Spengel; Otto H. Jacobs

Opis

Our small book presents areport which has been prepared in the year 2000 for the Taxation and Custorns Union Directorate General of the European Commission, under contract no. T AXUD / 00 / 312. Some of the results form part of the report "Company Taxation in the Internal Market" of the Commission Services released in autumn 2001. We present estimates of effective average tax rates (EATR) in five EU Member States (France, Germany, Ireland, the Netherlands and the UK) plus the USA based on the European Tax Analyzer approach. The European Tax Analyzer is a computer based model firm approach for the computation and comparison of international company tax burdens. It has been developed in co-operation with the Centre for European Economic Research (ZEW). We would like to thank the ZEW for this co-operation. Furthermore, we gratefully acknowledge the help and advice of Gerd Gutekunst, Rieo A. Hermann and Thorsten Stetter in preparing the report. Special mention must be made of Gerd Gutekunst, who was also responsible for preparing the printed version of this report.

Spis treści

Executive Summary.- 1.1 Background, aim and structure of the study.- 1.2 Methodological concept of the European Tax Analyzer.- 1.3 Tax parameters incorporated into the model.- 1.4 Structure of the model-firm and other economic assumptions for the base case.- 2 Comparison of the effective tax burden over a ten year period for a base case scenario assuming the tax regimes for the fiscal year 1999.- 2.1 Tax burden at the level of the corporation.- 2.1.2 Overview of results.- 2.1.2 Impact of different taxes on the effective average tax burden.- 2.1.2.1 Overview.- 2.1.2.2 Corporation tax.- 2.1.2.2.1 Tax bases (computation of taxable income).- 2.1.2.2.2 Tax rates.- 2.1.2.3 Trade tax on income and other taxes on corporate income.- 2.1.2.4 Non profit taxes.- 2.1.2.4.1 Real property tax (real estate tax).- 2.1.2.4.2 Property taxes.- 2.1.2.4.3 Other non-profit taxes.- 2.2 Tax burden at the overall level (corporation and domestic shareholders).- 2.2.1 Relevance of shareholder taxation (personal taxes).- 2.2.2 Comparison and analysis of results.- 2.2.2.1 Corporation tax systems.- 2.2.2.2 Income tax rates.- 2.2.2.3 Capital taxes.- 2.3 Conclusions.- 3 Sensitivity analysis.- 3.1 Primary remarks.- 3.1 Level of the corporation.- 3.2.1 Investment policy.- 3.2.2 Structure of finance.- 3.2.3 Profitability.- 3.2.4 Different industries.- 3.3 Overall level (corporation and domestic shareholders).- 3.3.1 Dividend policy.- 3.3.2 Equity to total capital ratio.- 3.4 Conclusions.- 4 Effects of the German tax reform 2001.- 4.1 Description of major tax changes.- 4.2 Changes of the tax burden at the level of the corporation.- 4.2.1 Base case scenario.- 4.2.2 Different industries.- 4.3 Changes of the tax burden at the overall level (corporation and domestic shareholders).- 4.4 Conclusions.- 5 Changes of the effective average tax burden since 1995.- 5.1 Changes of the tax burden at the level of the corporation.- 5.2 Changes of the tax burden at the overall level (corporation and domestic shareholders).- 5.3 Conclusions.- 6 Impact of hypothetical tax reforms in the EU.- 6.1 Overview on simulations.- 6.2 Reforming the corporation tax bases.- 6.3 Reforming the corporation tax rates and the local taxes.- 6.4 Reforming the corporation tax systems.- 6.5 Conclusions 85.- 7 Comparison of the European Tax Analyzer results with those obtained by the Devereux-Griffith model.- 7.1 Problems inherent in comparing results obtained by different approaches.- 7.2 Comparison of the effective tax burdens for the base case scenarios.- 7.2.1 Level of the corporation.- 7.2.2 Overall level (corporation and domestic shareholders).- 7.3 Effects of the German tax reform 2001.- 7.4 Effects of hypothetical tax reforms in the EU.- 7.5 Conclusions.- 8 Final conclusion.- References.- Appendix A: Financial ratios of the different industries.- Appendix B: Detailed results for the base case (section 2) and the sensitivity analysis (section 3) including the German Tax reform 2001 (section 4).- Appendix C: Changes of the effective average tax burden since 1995 (section 5).- Appendix D: Impact of hypothetical tax reforms in the EU (section 6).- List of Figures.- List of Tables.