Taxing Corporate Income: A Tax Halfway Across the Ford?

Abstract

In the period 2001-2018 The corporate income taxation has been marked by the need of national legislators to respond to international competition along the two dimensions of tax rate and tax base: this response entailed the reduction of the tax rate and the broadening of the tax base, while at the same time attracting a new one, both by combating international erosion and by reducing the possibility of internal deduction. The analysis of the change that occurred in the last decades shows that similar modifications have been introduced, following also the indications of the OECD BEPS project. In a scenario marked by initiatives towards the reduction of tax base competition, two factors destabilize this search for a balance: the digitalization of the economy, and the international issues of the US tax reform. The current international tax framework seems to be inappropriate to tackle the new challenges.

Keywords: Corporate income taxation, International taxation

JEL Classification: H25, H87