Debt Bias in Corporate Taxation and the Costs of Banking Crises in the EU

During the period 2008-2012, EU governments incurred substantial costs bailing out banks. As corporate income taxation (CIT) in most countries still favors debt- over equityfinancing, reducing or eliminating this debt bias would complement regulatory reforms reducing costs of financial crises. To estimate this effect, we use a two-step approach. First, using panel regressions on a […]

Addressing the Debt Bias: A Comparison between the Belgian and the Italian ACE Systems

This paper reviews the experiences of Belgium and Italy with ACE-type systems of corporate taxation. The comparison focusses on the definition of the base for the computation of the allowance and the anti-avoidance framework to tackle abuses. It is argued that the Italian system, with its incremental feature and a comprehensive anti-avoidance framework targeting transactions […]