Possibilities of harmonization of direct taxes in the EU

Adela Feranecová,Eva Manová,Jana Simonidesová,Pavel Blaščák,Marek Meheš,Slavomíra Stašková

doi:10.21511/imfi.14(2-1).2017.04

Abstract

Currently, indirect taxes in the EU are highly harmonized, however, harmonization of direct taxes is still a very complex problem. Many EU member states refuse to give up their tax sovereignty, which would become considerably limited because of the har¬monization of direct taxes. Today, attention is paid to the harmonization of the tax base of corporate income tax, while a number of ways are under consideration. The European Council has issued a draft of Directive for a common consolidated tax base of corporate income tax in 2011 and updated in 2012. This draft must be approved by all member states, but some of them, however, have expressed on the draft in negative way. Because of the severity of this problems, the authors decided to focus on this topic within this article, which deals with the calculation of the tax base by the laws of the Slovak Republic and by Common Consolidated Corporate Tax Base (CCCTB); and evaluate whether the tax harmonization of direct taxes would be advantageous for the particular business.

Highlights

INTRODUCTIONThe European Union has 28 member countries, which means that 28 member states are equal to 28 different taxation systems
Taxes and the tax system are a delicate topic for many countries around the world
This paper deals with the calculation of the tax base by the laws of the Slovak Republic and by Common Consolidated Corporate Tax Base (CCCTB); and evaluate whether the tax harmonization of direct taxes would be advantageous for the particular business

Summary

INTRODUCTION

The European Union has 28 member countries, which means that 28 member states are equal to 28 different taxation systems. Different tax systems are inconvenient, especially for multinational companies that operate in the domestic and in several foreign markets. Economic policy of each country is trying to support the economic growth in order to increase the living standards of individuals and households. In order to achieve this objective, it is necessary to collect taxes and implement particular fiscal policy in the country. Fiscal policy in the EU countries is directly related to tax harmonization. The EU’s philosophy is that individual member states should adapt their tax systems in order not to compete with each other and so support the common market. This paper deals with the calculation of the tax base by the laws of the Slovak Republic and by Common Consolidated Corporate Tax Base (CCCTB); and evaluate whether the tax harmonization of direct taxes would be advantageous for the particular business

TAX SYSTEM IN THE cerning the structure of taxes and the minimum

TAX HARMONIZATION

No of employees

Comparison of factors affecting

Findings

CONCLUSION