On Eu Tax Coordination

The paper studies on the process of company tax harmonization in European Union (EU) in the process from economic integration to political integration in the internal market, based on the analyses of the negative effect of 15 different national systems of company tax in EU. After above introduction and analyses, I prospects for the trends of company tax in the world and looks at ways of the reform of corporate income tax in China.The paper is made up of five parts:First, introduces the economic integration in EU and puts forward that political integration in EU needs substantial economic bases. However, 15 different national systems of company tax lead to many obstacles to cross-border trade, investment and economic activity in the internal market.Second, analyzes the problem of 15 different national systems of company tax bring about, these problems are examined in detail from three point of view, that is efficiency, fairness and administration. On basis of these analyses, the paper put forward the necessarily of company tax harmonization.Third, the concept of tax harmonization. This part introduces the inadequate mode of fiscal integration, e.g. tax equalization, tax coordination, and why they are inadequate.The fourth part is the most important one. In this section, the paper introduces the whole process of company tax harmonization in EU from year 1962 till now. Ruding report in 1992 is a comprehensive study on company tax in EU, however its detailed and valuable findings and recommendations met with limited support and failed to achieve much progress. In 1997, the tax package in EU seeks to develop a co-ordinated approach to harmful tax competition and it plays an important role in internal market. Recently, the EU has set itself the strategic goal "become the most competitive and dynamic knowledge-base economy in the world". Company tax becomes one of the obstacles to this goal. The EU commission then provides atwo-strategy to remove these obstacles.The fifth part serves to study the trends of company tax reform in the world according to above four parts of analyses. What's more, this paper looks at ways of the reform of corporate income tax in China.