Taxes

The Commission has requested Spain, under EU state aid rules, to abolish a 2002 provision in its corporate tax that allows Spanish companies to amortise ‘financial goodwill’ deriving from acquisitions of shareholdings in companies in third countries. The Commission also asks for the recovery of any aid granted under this provision since 21 December 2007 where concrete legal obstacles to investment could not be demonstrated.

While governments are tempted to raise taxes on capital gain in order to reduce their public deficits, the study realized by the London based Adam Smith Institute explains why the temptation should be resisted. Based on clear economic reasoning and on evidence from the US, Australia and Canada, they show that there is a Laffer curve effect at work; one that is probably stronger than in the case of personal income tax. In other words: higher capital gains tax rates are very likely to give lower tax revenues.

In 2006 a major change was implemented in France regarding the income tax. Not only the top marginal rate was lowered (from 48.09% to 40.00%), but the same treatment was…

This is the question addressed by Jason Fichtner and Katelyn Christ in their working paper for the Mercatus Center. They explain that a real tax reform is necessary, rather than…

Romanian government took recently more and more controversial measures. Many of them are officially presented as a consequence of the economic and financial global crisis. Actually, they are the consequence of ill-conceived, poorly-explained and incoherently applied fiscal reforms. We have presented elsewhere some of the problems faced by Romania during its transition (see the reports for Romania in IREF’s yearbooks on taxtion). We will here limit ourselves to problems related to current budgetary difficulties. In short, Romania’s deficit is the result of many errors on the expenditure side as well as on the revenues side of its consolidated budget. Similar errors are still made today.

This report offers a survey of EU energy taxation scheme and provides some insights on the possible outcomes of current EU policy in the energy domain. The authors are reviewing…

Portugal has a long tradition of corporate tax evasion. Perception of high tax burden, social tolerance to fraud and evasion, high psychological fiscal pressure* , instability and insecurity of the tax codes and complex and slow fiscal system are the factors usually pointed as the ultimate causes for this phenomenon.

2009/2010 has been a period of phoney fiscalism in the United Kingdom. The period is sandwiched between the economic crisis, which put fiscal policy onto an emergency, macro-economic footing and an election (May 6th 2010). Economic crisis has been marked in the UK as in most other countries by a severe worsening of the fiscal balance which has been supported for now by government borrowing and straightforward money-creation (“quantitative easing”). The political constraint of election has led to a more than usually cosmetic approach to changes in the structure of taxation.

It’s not unusual to hear people criticise the fiscal competition states engage in, pretending that such practices lead to losses in tax revenues. In this matter, the expression “harmful fiscal competition”, which is notably retained by the European Union, is often used, though sometimes inappropriately. The “harmful” character of fiscal competition between states is actually rather questionable and one may seriously doubt the very existence of such a harmful character, regardless of its form and the circumstances that accompany it.

Following the last visit to Paris of the German Minister of Finances Wolfgang Schäuble, the French and German governments have decided to harmonize their tax systems. Both sides have emphasised the positive impact that such a harmonization could have on the economic growth in Europe and on the health of the euro.