Effective tax levels using the Devereux/Griffith methodology. Project for the EU Commission TAXUD/2013/CC/120: Intermediate report 2015

Abstract

[Introduction] This 2015 report of the project TAXUD/2013/CC/120 presents estimates of the effective tax rates on investment in the EU member states, FYROM and Turkey as well as Norway, Switzerland, Canada, Japan and the United States. The work presented in this report updates for the year 2015 the analyses of the previous projects within the former Framework Contract TAXUD/2008/CC/099 and the current Framework Contract TAXUD/2013/CC/120. Following the methodology used in previous work, we apply the Devereux and Griffith framework to compute effective tax levels. The report considers primarily taxes on corporations in each country, but also includes analyses of personal taxes on investment and saving. It also considers both cross-border investment and investment by small and medium sized enterprises (SME). This report is organized as follows. Section A introduces the tax parameters for the period 1998 - 2015 covered by this report. These tax parameters form the basis of the computations of effective tax rates. Section B provides worked examples for several countries for a better understanding of the model. Section C then provides detailed results for domestic investment in all countries covered in this report. In addition to results focusing on the corporate level, this report comprehensively includes the analysis of personal taxes on investment and saving at the shareholder level for three different types of shareholders when calculating effective tax rates on domestic investment. Section D presents estimates for effective tax burdens of cross-border investment if all countries were either locations of investment or locations of the investor. Finally, Section E provides effective tax burdens of SMEs in selected countries. Please note that all results presented in this report refer to the legal situation as of 1 July 2015