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A note on the taxation of capital income in the Czech Republic and Poland

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  • Rachel Griffith

    (Institute for Fiscal Studies)

Abstract
The transition of the eastern European countries into market-based economies and their potential integration into the European Union raise questions about how their capital income tax systems should be structured and to what extent they are in line with the rest of Europe. This note presents a brief analysis of the tax systems currently in place and considers what issues should be of concern in setting tax policy in the future. The impact capital income taxes have on the incentives for firms to invest in the Czech Republic and Poland is described using a marginal effective tax wedge and an average effective tax rate. Simulations of some simple reforms are also presented. First, some brief comments are made on what the optimal tax policy for smaller capital-importing countries might be and how this should inform policy in the transition economies. The standard theoretical literature on optimal taxation in a small open economy suggests that residence-based taxation is optimal, implying that the tax

Suggested Citation

  • Rachel Griffith, 1996. "A note on the taxation of capital income in the Czech Republic and Poland," Fiscal Studies, Institute for Fiscal Studies, vol. 17(3), pages 91-103, August.
    • Handle: RePEc:ifs:fistud:v:17:y:1996:i:3:p:91-103
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    File URL: http://www.ifs.org.uk/fs/articles/fsgriffith96.pdf
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    References listed on IDEAS

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    Cited by:

    1. Owens, Jeffrey & Whitehouse, Edward, 1996. "Tax reform for the 21st century," MPRA Paper 21135, University Library of Munich, Germany.
    2. Whitehouse, Edward, 1999. "The tax treatment of funded pensions," Social Protection Discussion Papers and Notes 20126, The World Bank.

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