title: The Greek corporation income tax : Some aspects of business tax harmonization
Creators: name: Patsouratis, Vassilis
Publisher: name: University of Glasgow
Year: 1980
Subjects: subject: Economics.

description: The thesis aims to access the present corporation income tax system in Greece, to consider what changes membership of the E.E.C. is likely to involve and to estimate the impacts resulting from these changes upon economic yariables. As a background of our discussion, the first chapter discusses the rationale of corporation income tax, the shifting and incidence question, and finally the effects of corporate taxation upon the economy. The discussion of the rationale is mainly concerned with the separate and conduit theories of corporate taxation. In addition, the ability-to-pay and benefit principles are discussed. Dealing with the shift-ting question we discuss the statistical and economic problems which the empirical studies face. The effects of corporate taxation are discussed in the context of dividend policy, methods of financing, and resource allocation. Chapter two discusses the alternative corporate tax systems from both the domestic and the international point of view, This discussion starts with a new classification of the alternative systems of corporate taxation. The systems are judged under various goals such as dividend policy, methods of financing investment programmes, income distribution and resource allocation. From the international point of view we establish rules for efficiency and equity for each system. In Chapter three the dividend deduction system is discussed as it is applied to Greece. This chapter begins with a critical discussion of the overall tax structure whose the main characteristics are the predominance of indirect taxes, the lack of a capital gains tax, the minor role of the wealth taxes and the corporate tax followed by a plethora of tax incentives. We construct a tax discriminatory variable between dividend and retention to test the existence and effectiveness of such discriminatory policy in Greece. The role of the internal generated funds, of the banking system and of the public financial institutions in financing investment projects is discussed. Then we go on to calculate tax savings from depreciation and investment allowances in the Greek manufacturing. Chapter four contains an econometric analysis of dividend and investment behaviour. The dividend model is a generalization of the previous dividend models. Various econometric techniques are used to estimate this model. A joint profits-accelerator model is used to test if retained profits had any contribution to financing investment projects. The simultaneity and interdependence of dividend and investment decisions are tested using both single equation and simultaneous equation models. Finally, a modified neo-classical investment model is used to test the effectiveness of tax incentives in Greece. Chapter five deals with the problem of corporate tax harmonization, within the E.E.C. We begin the discussion by stating the objectives and the achievements of the Community in the area of taxation. The three proposals which have been made for corporate tax systems harmonization are discussed. Emphasis is given to the last proposal concerning the imputation system. In the second part of this chapter the causes of the divergencies between the taxable base of the E.E.C, member states are discussed. We express some preliminary ideas how these discrepancies would be lessened. Finally, a theoretical discussion of tax rate harmonization takes place. The final chapter outlines the main changes which membership of the E.E.C. is likely to involve in the Greek corporate tax system, evaluating their likely effects upon the Greek economy in terms of equity, efficiency and growth. The study uses a partial equilibrium analysis to estimate these effects since both the appropriate econometric model to capture the simultaneous feedbacks among the E.E.C. member countries and the required data for the Greek economy are not available. The final section of this chapter re-capitulate the main findings and methods used by this thesis. In addition, some indications are made for further research in this area of taxation.