... all income across the EU. Income is broken up into three tax identities, corporation tax, savings tax (taxation of interest income) and personal income tax. I shall then analyse tax competition and evaluate whether this is a better alternative to the implications caused by a common tax on income. Corporation tax In 1992 the Ruding report made several proposals for harmonisation of corporate taxation, including a recommendation of a minimum corporate tax rate of thirty percent. The EU has still not taken up these proposals, however in 1997 the EU did agree to a 'Code of conduct' which aims to eliminate tax concessions that are viewed discriminatory. The aim of a common corporate tax is to avoid distortions in the allocation of capital across the EU and the transfer of paper profits in multinational firms across borders. Currently there is concern amongst some in the EU that the different tax rates in ...

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