Reports on taxation

Once again, IREF’s yearbook on taxation confirms that in Europe, including within the European Union, fiscal policies are far from homogeneous. One obvious reason for this is that countries are not confronted with similar situations. While some, such as the Netherlands, Norway, Slovakia, Luxembourg, Germany, Sweden or Switzerland, are close to a balanced budget, others are more or less - and sometimes badly - in need for fiscal consolidation. The latter group of countries—those that must urgently reduce public deficit and public debt, forms a large majority.

This report offers a survey of EU energy taxation scheme and provides some insights on the possible outcomes of current EU policy in the energy domain. The authors are reviewing the existing legislation, namely the Council Directive 2003/96/EC and are analyzing the possible economic ground for harmonization of European energy taxes. They conclude that the virtues of energy taxation—including so-called double-dividend taxes—as a tool for energy policy are doubtful. A further development of energy taxation coupled with EU harmonization would most probably leads away from sound fiscal policy as well as from sound energy policy.

What is the current state of public finance in the EU countries? How did the various governments reacted to the crisis which developed in the second half of 2008? To what extent did it trigger a change in tax policy? IREF has asked scholars and experts from fifteen different EU countries to present and evaluate the 2008 tax policies of their respective countries.

The system of taxation of corporate profits, introduced in 2000 in Estonia, is unique. Under this system the reinvested profit is not taxed, only the distributed profit is taxed. Thus, the taxation is shifted from the moment when profits are earned to the moment when profits are distributed to the owners of the capital. This is the reason why the Estonian system of corporate taxation became well known as “zero corporate profit on reinvested profit”.

Abstract: The idea to compare the fiscal decentralisation and trends in this respect in the European countries is a core for the IREF project. This means that the strict rules of measurement of this complex issue, as fiscal decentralisation is, should be applied to all fiscal systems. Therefore I will follow the description how to generate the index of fiscal decentralisation invented and provided by the prof. Garello and Price . Nevertheless I will also describe and analyze problems which I have met when adopted this scheme into the Polish fiscal system.