CORPORATE INCOME TAX BURDEN IN THE EU: DOES IT REFLECT A TAX COMPETITION?

One of the main parts of the decision which shapes European fiscal policy is the design of tax systems of Member states that they consider most appropriate and according to their preferences. Although variation proposals have been made to harmonize direct taxes on corporate income in the European Union, at present it is foreseen that the adoption of tax systems of Member States does not lead to a harmful tax competition. Empirical verification of the existence of harmful tax competition on the field of direct corporate taxation is difficult, but the literature have been tried several methods. In this paper, we analyze the trends in corporate income taxation in the European Union and the way they are related to tax competition. It is preceded by an analysis of both positive and negative aspects that accompany tax competition. Our data indicate that the hypothesis of tax competition generating a lining to the "bottom" level of taxation is only partially tested empirically, namely for statutory tax rates, and weakly for effective tax rates. At the same time, its impact on budgetary revenues may not be obvious.