Resource title

Investment Decisions and Tax Revenues Under an Allowance for Corporate Equity

Resource image

image for OpenScout resource :: Investment Decisions and Tax Revenues Under an Allowance for Corporate Equity

Resource description

In recent years, some European countries have relied on elements of an allow-ance for corporate equity (ACE) in the design of their tax systems. We analyse the effects of ACE-based taxation on rates of return and effective tax rates. In-vestment neutrality is lost if the imputed interest rate deviates from the market interest rate. With increasing profitability, the relative importance of the ACE compared with the statutory tax rate decreases. This might induce disadvantages for countries that compete for profitable, multinational companies. Revenue ef-fects indicate that tax rates under an ACE-based tax system should not exceed those in competing countries by much.

Resource author

Lothar Lammersen

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/24638

Resource license

Adapt according to the presented license agreement and reference the original author.