Profit shifting and the tax response of multinational banks in eastern Europe

The aim of the paper is to measure the amount of profit shifting within the banking sector in Eastern European countries. The paper uses firm-level bank data from the Bankscope database of multinational subsidiary banks operating in Eastern Europe for a period of 10 years (2006-2015). An empirical analysis is performed on the panel data to identify the profit-shifting activities of these banks. Focusing on the banking sector of Eastern European countries, which are a microcosm of the European Union, substantial evidence of profit shifting is found and confirms that banks have enhanced tax-planning opportunities similar to firms from different jurisdictions. The paper also seeks to contribute to recommendations on how fair and sustainable taxation and social policy reforms can increase the economic stability of the EU member states.O

Future EU Funding: a Case of Lump-Sum Tax

This paper is concerned with the EU financing reform, where the lump-sum tax is considered as an alternative source of revenue. The purpose of this study stems out of the current debate related to the EU budget reform, where tax-based own-resources are required to replace the current system of own resources of the EU budget. The novelty of this research arises from the evaluation of a hypothetical EU lump-sum tax as a future replacement of GNI and VAT-based EU budget own sources. The aim of this paper is to analyze the potential of a lump-sum tax as a source of future EU funding. We consider lump-sum tax as an EU per capita charge applicable to all citizens of 28 EU member states. In order to assess the lump-sum tax potential we simulate five different lump-sum tax rates and compare the obtained yield to current EU own resources. The results of the research show that a charge per capita in the EU does not have the capacity to fully replace GNI or VAT-based EU own resources. Therefore, we consider the EU per capita charge as a form of complementary source to fund the EU own budget, with no real potential to fully replace the current EU own resources.O

Consolidation under CCCTB system

In 2007, when the pilot project of Home State Taxation System should started, but none of the EU Member States applied for, the European Commission has turned its attention to different project in the area of corporate income taxation. The paper presents the problems of consolidation under the system of Common Consolidated Corporate Tax Base, which is at present the aim of the European Commission in the area of corporate tax harmonization. Firstly, the paper presents the results of comparative analysis, which have been done throughout the EU Member States. The research was aimed at the area of group taxation schemes availability. Secondly, the paper presents the draft of CCCTB directive in the field of creation of the group for taxation purposes, the rules for access and exit from the group and the rules for calculation of thresholds for voting rights. The different possibilities of group creation are presented on the schemes. The paper also discuss the rules, suggested by the draft directive, which could create legal uncertainty for the companies and could cause the situation in which the companies would not know whether they can consolidate their accounting results or not, or whether they are the member of the group or not. The paper suggests the possible solutions in that area. At the end, there are also mentioned and discussed the methods, which could be used for consolidation under CCCTB system in the EU

Taxing of financial sector as possible own resource of EU budget

The discussion about the possible taxation of the financial sector has started in the European Union as a result of the financial crisis which has spread to the Europe from the United States in 2008. European Commission concluded that EU should lead the efforts to introduce system of levies or taxies on financial institutions. EU member states individually committed to support the financial sector for a total about EUR 4.6 trillion (i.e. 39% of EU-27 GDP in 2009). Those public interventions have significant budgetary consequences (strongly felt in Greece, Spain or Italy) and imposes a heavy burden on the present and future generations. Therefore there is a strong consensus not only on the level of the European Union but also internationally, that financial sector should contribute to the public finance more fairly. As a reaction on costs of the financial crisis which was paid out from the public money, some of the countries immediately introduced temporary measures in order to collect back paid out money. The aim of the paper is to research the possibility of financial sector taxation, to discuss the proposal of the European Union on the introduction of financial transaction tax on EU level and through the multi-criteria analysis to research, whether this type of the tax is suitable as an own resource of EU budget

Consolidation under CCCTB system

In 2007, when the pilot project of Home State Taxation System should started, but none of the EU Member States applied for, the European Commission has turned its attention to different project in the area of corporate income taxation. The paper presents the problems of consolidation under the system of Common Consolidated Corporate Tax Base, which is at present the aim of the European Commission in the area of corporate tax harmonization. Firstly, the paper presents the results of comparative analysis, which have been done throughout the EU Member States. The research was aimed at the area of group taxation schemes availability. Secondly, the paper presents the draft of CCCTB directive in the field of creation of the group for taxation purposes, the rules for access and exit from the group and the rules for calculation of thresholds for voting rights. The different possibilities of group creation are presented on the schemes. The paper also discuss the rules, suggested by the draft directive, which could create legal uncertainty for the companies and could cause the situation in which the companies would not know whether they can consolidate their accounting results or not, or whether they are the member of the group or not. The paper suggests the possible solutions in that area. At the end, there are also mentioned and discussed the methods, which could be used for consolidation under CCCTB system in the EU

Evaluation of Greenhouse Gas Emissions and Related Aspects: Case of the Czech Republic

The most important drivers of increasing greenhouse gas emissions are increasing world’s population, economic development resulting in higher level of productions and consumption, but also unanticipated increases in the energy intensity of GDP and in the carbon intensity of energy. The EU committed to reduce their greenhouse gas emissions by 20% until 2020 or 40% until 2030 compared to 1990 levels of the Kyoto Protocol. The Czech Republic enlarged EU in 2004 as a country from Eastern Europe where usually the heavy industries or agriculture prevail over other sectors. The aim of the paper was an evaluation of the development of greenhouse gas emissions and related aspects in the industry of the Czech Republic. Based on the results was concluded that although greenhouse gas emissions of the Czech Republic are deeply below the Kyoto targets, there are areas for improvements e.g. in case of energy intensities, as well as in case of carbon intensity and carbon productivity, where the Czech Republic reaches worse results than the EU28. Therefore is recommended to decrease greenhouse gas emission and increase gross value added generated by each NACE sector. Both those factors will impact on improvement of energy intensity, carbon productivity as well as greenhouse gas emissions per capita

Mandatory CCCTB implementation in the Eurozone and its impact on corporate tax revenues in the Czech republic

The European Commission has been attempting to coordinate the corporate taxation systems of the EU Member States since 1962. One of the most ambitious projects in the history of the harmonization effort was introduced on 16 March 2011, when the European Commission published, after more than ten years of work, the text of the CCCTB Directive proposal. The directive proposal suggests the consolidation regime and the allocation formula with three equally weighted factors – sales, labour and assets, i.e. the consolidated tax base should be shared among the members of the group based on those micro factors. That tax-sharing mechanism as a new allocation rule has raised much discussion and will defi nitely have an impact on EU Member States’ budgets. The aim of the paper is to research the impact of mandatory CCCTB implementation in the Eurozone on tax bases in the Czech Republic and consequently on Czech corporate tax revenues, and to identify whether the implementation of the system in the Eurozone will result in the outfl ow or infl ow of tax bases from/to the Czech Republic. The research is based on empirical data from the Amadeus and Bankscope databases covering 2,424 parent companies with 3,860 Czech subsidiaries. In order to verify the results of the research, a sensitivity analysis was also performed. The research revealed that mandatory implementation of the CCCTB system in the Eurozone would have negative impact on the tax bases currently generated and located in the Czech Republic. As a result of this fact, the Czech Republic would lose between 0.87% and 8.84% of the corporate tax liability recorded in 2011