The Evolution of the Tax Burden for EU Companies

Contemporary Economics (2018), Vol. 12. No. 4, pp. 447-458, 2018

12 Pages Posted: 24 May 2019

See all articles by Elisabeth Bustos

Elisabeth Bustos

Universidad Politécnica de Valencia

Salvador Climent-Serrano

University of Valencia - Faculty of Economics

Gregorio Labatut Serer

University of Valencia - Department of Accounting

Date Written: December 31, 2018

Abstract

Since its creation, the EU has targeted tax harmonization to protect the single market and avoid capital outflow to regions that have lower tax rates. However, despite repeated attempts, complete convergence has not yet been achieved. Using the effective tax rate, the statutory tax rate, and the absolute difference between these two rates, this study explored the trends of the tax burden in 15 EU member states. The study period of 2006 to 2014 enabled analysis of the tax burden before and after the financial crisis. Analysis was conducted using an econometric model. The results suggest that during periods of economic stability, the tax burden tends to converge. In contrast, during periods of crisis, countries apply their own tax policies to protect themselves from the adverse effects of the crisis.

Keywords: Tax Harmonization, Effective Tax Rate, Tax Burden, European Union

JEL Classification: H26, H7

Suggested Citation

Bustos, Elisabeth and Climent-Serrano, Salvador and Labatut Serer, Gregorio, The Evolution of the Tax Burden for EU Companies (December 31, 2018). Contemporary Economics (2018), Vol. 12. No. 4, pp. 447-458, 2018, Available at SSRN: https://ssrn.com/abstract=3378505

Elisabeth Bustos (Contact Author)

Universidad Politécnica de Valencia ( email )

Valencia
Spain

HOME PAGE: http://www.upv.es

Salvador Climent-Serrano

University of Valencia - Faculty of Economics ( email )

Valencia, E-46022
Spain

Gregorio Labatut Serer

University of Valencia - Department of Accounting ( email )

Edificio Departamental Oriental
Avda. dels Tarongers, s/n
Valencia 46071
Spain

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