<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The paper examines the convergence of tax systems in Central and Eastern European countries (CEECs) over the period 1995–2018. Due to the increasing impact of tax competition, we have focused on income taxes, in particular, corporate ones. We have identified the factors that influence the taxation system and trends in income taxation in the CEECs by adapting the hidden Markov model approach. We find that many CEECs have reduced income taxation in the analysis period, mainly by lowering tax rates. Corporate income taxes have also decreased in many CEECs in the same period; however, the reverse has been observed too. Both convergence and divergence have been identified among the CEECs over the period considered. The speed of these processes based on the used variables varied depending on both exogenous and endogenous factors. These factors have been diagnosed as being specific to the periods of tax reforms, i.e., before and after accession to the European Union (EU) and the global financial crisis.</p>
</abstract>

The paper examines the convergence of tax systems in Central and Eastern European countries (CEECs) over the period 1995–2018. Due to the increasing impact of tax competition, we have focused on income taxes, in particular, corporate ones. We have identified the factors that influence the taxation system and trends in income taxation in the CEECs by adapting the hidden Markov model approach. We find that many CEECs have reduced income taxation in the analysis period, mainly by lowering tax rates. Corporate income taxes have also decreased in many CEECs in the same period; however, the reverse has been observed too. Both convergence and divergence have been identified among the CEECs over the period considered. The speed of these processes based on the used variables varied depending on both exogenous and endogenous factors. These factors have been diagnosed as being specific to the periods of tax reforms, i.e., before and after accession to the European Union (EU) and the global financial crisis.

Trends in income taxation: are taxes converging in Central and Eastern European countries?

International Journal of Management and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The paper examines the convergence of tax systems in Central and Eastern European countries (CEECs) over the period 1995–2018. Due to the increasing impact of...

Trends in income taxation: are taxes converging in Central and Eastern European countries?

Article Category: Empirical Paper

Online veröffentlicht: 31. Dez. 2023

Seitenbereich: 349 - 370

Eingereicht: 03. Mai 2023

Akzeptiert: 05. Sept. 2023

DOI: https://doi.org/10.2478/ijme-2023-0019

Schlüsselwörter
income tax, tax competition, tax convergence

© 2023 Michał Bernardelli et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Trends in income taxation: are taxes converging in Central and Eastern European countries?

Article Category: Empirical Paper

Online veröffentlicht: 31. Dez. 2023

Seitenbereich: 349 - 370

Eingereicht: 03. Mai 2023

Akzeptiert: 05. Sept. 2023

DOI: https://doi.org/10.2478/ijme-2023-0019

Schlüsselwörterincome tax, tax competition, tax convergence

© 2023 Michał Bernardelli et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Schlüsselwörter
income tax, tax competition, tax convergence