Company Tax Reform in Europe and its Effect on Collusive

We study how harmonization of corporate tax systems affects the stabil-ity of international cartels. We show that tax base harmonization reinforces collusive agreements, while harmonization of corporate tax rates may desta-bilize or stabilize cartels. We also find that bilateral and full harmonization to a common standard is worse from society’s point of view than unilateral harmonization to a minimum tax standard. JEL Classification: H87, L