Empirica – Journal of European Economics

Sponsored by the Austrian Economic Association and the Austrian Institute of Economic Research

Empirica publishes empirical and theoretical work on all economic aspects of European Integration. The topics may range from all challenges concerning the deepening of the European Union (Single Market, Lisbon Agenda, EMU) to enlargement and the external relations of the EU (globalisation).

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Kunka Petkova, Alfons J. Weichenrieder
The relevance of depreciation allowances as a fiscal policy instrument: A hybrid approach to CCCTB?
Empirica, 2020, 47(3), S.579-610, http://www.springer.com/10663
A major goal of the European Commission in the area of direct taxation is the introduction of a common consolidated corporate tax base in Europe (CCCTB). While hardly discussed in the literature, such a system would limit national discretion over tax depreciation. In a sample of up to 47 countries, we find that the probability of a tax reform that improves the depreciation allowances increases, if the macroeconomic situation is weak. This suggests that changes in depreciation allowances are used as a fiscal instrument for stabilisation. A common consolidated tax base deprives national governments from implementing investment incentives via accelerated depreciation. This paper discusses the possible implementation of a hybrid system that combines features of formula apportionment and separate accounting. Such a hybrid system may substantially mitigate transfer pricing problems and other tax planning issues, whilst preserving national discretion over depreciation allowances.
Forschungsbereich:Makroökonomie und europäische Wirtschaftspolitik

Managing Editor

Univ.-Prof. Mag. Dr. Fritz Breuss

Funktion: Ökonom (Senior Economist), Managing Editor Empirica