Work

Reducing tax compliance costs through corporate tax base harmonization in the European Union

Year: 2020

Type: article

Abstract: The aim of the Common Consolidated Corporate Tax Base (CCCTB) proposal made by the European Commission is to reduce both tax compliance costs and tax avoidance opportunities of cross-border operations within the European Union. However, to date the scarcity of comparable estimates of tax compliance costs has limited researchers’ ability to assess the probable impact of this proposal. We exploit recently released unique survey data designed to provide comparable information on corporate tax compliance costs in order to assess the impact of the CCCTB, using a general equilibrium modeling approach. Our results suggest that the reduction in tax compliance costs would be associated with greater economic efficiency. Member states with the lowest compliance costs before the reform and those that have large inward foreign investment stock would benefit more than other member states. Cross-border business operations would also benefit more than domestic ones. The impact on non-EU countries, such as the US and Japan, would be limited.

Source: Journal of International Accounting Auditing and Taxation

DOI: 10.1016/j.intaccaudtax.2020.100355

Authors: Salvador Barrios, Diego d'Andria, Maria Gesualdo

Institutions: European Commission, Joint Research Center

Language: English

Topic: Corporate Taxation and Avoidance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,380

Funder: Joint Research Centre