Europe's Corporate Tax Levels Driven by Inner-Regional Competition, Not Global Pressure.
Corporate tax levels in Europe have decreased over the years, with tax competition being a major factor. A study looked into whether this competition is mainly within Europe or with other world regions. Using tax reaction functions, the study found that European countries compete with each other on tax rates, but not with countries outside Europe. This suggests that the decline in corporate tax levels in Europe is driven by inner-European tax competition rather than pressure from other world regions.