European States in a Bout of Corporate Tax Competition
Anna Banociova, Slavomira Tahlova
corporate income tax revenues, tax competitiveness, tax rates, foreign direct investments, European
In the corporate environment, globalization supports possibilities of mobile bases transfers
among states and therefore changes in the taxable income. Differences in tax systems as well as
in the level of corporate income tax revenues deserve attention in the context of tax competition.
Experts on tax competition in the field of corporate taxation can be divided into those who
perceive it positively, particularly because of its influences on the economic growth of the state,
and those who consider it as harmful, especially because of the possibility of tax base transfers
among states along with the impossibility of ensuring effective allocation of tax resources. The
main objective of this paper is to characterize tax competition between EU member states over
a ten-year period and to assess whether states are competitive in the field of corporate taxation.
Tax competitiveness among states is perceived based on the level of corporate income tax revenues
in relation to GDP. Based on the examination of determinants of corporate income tax
revenues, a draft of the econometric model of panel regression has been specified (fixed model
with individual effects) and is compiled from the main tax and macroeconomic determinants
that influence tax competitiveness in the field of corporate taxation. The conclusion confirms
that there is tax competition in the field of corporate tax between EU states, and there is a statistically
significant relation between the development of corporate income tax revenues and the
determinants of tax competitiveness that are influenced in the context of corporate taxation.
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Banociova, A., & Tahlova, S. (2019). European States in a Bout of Corporate Tax Competition. Journal
of Competitiveness, 11(3), 19-34. https://doi.org/10.7441/joc.2019.03.02