Like most regions around the world, European countries have experienced a decline in corporate income tax rates over the past four decades, but the average corporate income tax rate has leveled off in recent years.
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In such a determinant semester for Europe, principled tax policy can be an important tool for a more competitive European Union.
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Spain’s central government could learn some valuable lessons from its regional governments about sound tax policy.
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In the end, the best way for the EU to support Ukraine’s post-war recovery is to guarantee its tax sovereignty, not just its territorial sovereignty.
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What historical lessons of wartime finance can Ukrainian and EU policymakers learn to put Ukraine’s economy on a path to success during, and especially after, the war?
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The rules of tax competition are changing with the recent agreement on a global minimum tax and other changes to tax rules around the world, but that does not mean the contest is over.
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The EU Tax Observatory has taken an extreme view in assessing the global minimum tax. The rules were not meant to immediately reduce the stock of shifted profits or align profitability levels more closely with employment costs. The rules do change incentives for multinationals, but profits may continue to remain in low-tax jurisdictions for many years.
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While the European Commission focuses on improving VAT compliance, policy is a major contributor to VAT revenue losses. The VAT actionable policy gap is 15.65 percent, more than triple the compliance gap.
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Estonia has the most competitive individual tax system in the OECD for the 10th consecutive year.
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The 2023 version of the International Tax Competitiveness Index is the 10th edition of the report. Let’s take a look back and see how country ranks have changed over time.
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While existing carbon taxes are a step towards the right direction in addressing climate change and incentivizing reductions in emissions, there is considerable room for improvement to reach the ideal theoretical carbon tax model.
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According to the corporate tax component of the 2023 International Tax Competitiveness Index, Latvia and Estonia have the best corporate tax systems in the OECD.
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A harmonized EU tax base is a project in the making. Policymakers have a chance to put the Union on a path for increased investment and economic growth by focusing on the details of capital cost recovery.
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The variety of approaches to taxation among European countries creates a need to evaluate these systems relative to each other. For that purpose, we have developed the European Tax Policy Scorecard—a relative comparison of European countries’ tax systems.
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If the EU is going to harmonize its tax base, it should do so in a way that increases the efficiency and competitiveness of tax policy for the EU as a whole, and not just seek out the lowest common denominator.
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While there are many factors that affect a country’s economic performance, taxes play an important role. A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.
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The OECD recently released a trove of new documents on a draft multilateral tax treaty. The U.S. Treasury has opened a 60-day consultation period for the proposal and is requesting public review and input.
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High property taxes levied not only on land but also on buildings and structures can discourage investment in infrastructure, which businesses would have to pay additional tax on.
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The global minimum tax agreement known as Pillar Two is intended to curb profit shifting. However, OECD countries already have a variety of mechanisms in place that seek to prevent base erosion and profit shifting by multinational corporations.
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Pillar Two implementation is underway in many jurisdictions, and many governments are aiming to get their proposals approved before the end of 2023. However, estimating Pillar Two’s impact on government revenue is proving difficult. As a result, only a few countries have publicly presented their findings.
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