<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The European Union is not a homogenous area. This lack of homogeneity extends to taxes, which vary across jurisdictions. On average, Western Europe imposes significantly higher taxes on capital than New Member States, which joined the Community in 2004 and 2007. Often this fact is simply taken for granted. However, there are several arguments that can explain this variance. Although several of these arguments are well known and have been researched, they have not been assessed in combination, or used in a comparative analysis of corporate income tax (CIT) rates between EU member states. Because of interest in harmonizing CIT throughout the EU, the roots of divergent CIT is of particular and timely value. Therefore, this article we attempts to demonstrate the differences in CIT rates in the EU-15 and New Member States. In so doing the general characteristics of these country grouping is identified, and then discussed in the context of the taxation theory.</p></abstract>

The European Union is not a homogenous area. This lack of homogeneity extends to taxes, which vary across jurisdictions. On average, Western Europe imposes significantly higher taxes on capital than New Member States, which joined the Community in 2004 and 2007. Often this fact is simply taken for granted. However, there are several arguments that can explain this variance. Although several of these arguments are well known and have been researched, they have not been assessed in combination, or used in a comparative analysis of corporate income tax (CIT) rates between EU member states. Because of interest in harmonizing CIT throughout the EU, the roots of divergent CIT is of particular and timely value. Therefore, this article we attempts to demonstrate the differences in CIT rates in the EU-15 and New Member States. In so doing the general characteristics of these country grouping is identified, and then discussed in the context of the taxation theory.

Why the EU-15 Maintains Higher CIT Rates than the New Member States?

Ph.D. Student, Warsaw School of Economics

International Journal of Management and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Why the EU-15 Maintains Higher CIT Rates than the New Member States?"}

The European Union is not a homogenous area. This lack of homogeneity extends to taxes, which vary across jurisdictions. On average, Western Europe imposes...

Why the EU-15 Maintains Higher CIT Rates than the New Member States?

Published Online: Nov 20, 2014

Page range: 98 - 120

DOI: https://doi.org/10.2478/ijme-2014-0045

Keywords
macroeconomic policy, fscal policy, tax, corporate income tax

© 2014 Andrzej Karpowicz

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Why the EU-15 Maintains Higher CIT Rates than the New Member States?

Published Online: Nov 20, 2014

Page range: 98 - 120

DOI: https://doi.org/10.2478/ijme-2014-0045

Keywordsmacroeconomic policy, fscal policy, tax, corporate income tax

© 2014 Andrzej Karpowicz

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
macroeconomic policy, fscal policy, tax, corporate income tax