The EU enlargement with ten new Member States considerably widens the Internal Market and opens it to participants with very different levels of economic development. In this context, this study analyses the development of the tax burden on companies operating in the countries of the enlarged European Union. The neutrality of the different tax systems with respect to different sources of finance and types of investment is evaluated with an additional focus on small and medium sized enterprises (SME). The aim of the study is as twofold. On the one hand, we analyse the development of effective corporate tax rates on domestic and cross-border investments within the enlarged European Union (EU25) and a number of non-EU countries for a wide range of years. The determination of tax rates is based on the methodological approach by Devereux and Griffith. On the other hand, we also consider special tax schemes for SME within the EU25 and the taxation of non-incorporated SMEs in selected countries. We compare the situation for SMEs with large companies and analyse how this situation is affected by the choice of legal status.
01.01.2006 - 01.09.2008
European Commission, DG Taxation and Costums Union, Brüssel, BE