This paper presents evidence on the effective levels of corporate taxation in the EU. It presents evidence on the distribution of the cost of capital and the effective average tax rate across forms of investment and countries. By simulating alternative forms of harmonisation, it then highlights the main sources of differences across countries. In contrast to earlier work, based only on the cost of capital and on earlier tax regimes, the single most important source of divergence across countries is the statutory tax rate.


Devereux, Michael P.
Lammersen, Lothar
Spengel, Christoph


Efficiency, Corporate Taxation, Effective Tax Burdens, Tax Harmonization