Introduction: Company Tax Integration in the European Union – A Necessary Step to Neutralise ‘Excessive’ Behaviour within the EU?

Abstract

This special issue of the Erasmus Law Review is the result of an interdisciplinary workshop on ‘Company Tax Integration in the European Union – a Necessary Step to Neutralise “Excessive” Behaviour within the EU?’, held at the Erasmus School of Law in June 2013 and organized by the Foundation European Fiscal Studies in co-operation with Erasmus Law Review. A topic currently attracting considerable public attention, not least because of the Base Erosion and Profit Shifting (BEPS) project of the OECD instigated by the G20. During the past decades there has been intensive tax competition between EU Member States for attracting capital triggered inter alia by the four freedoms as laid down in the European treaties. Even though competition is widely seen as beneficial to society, in case of inter-jurisdictional tax competition this may not always be the case. The possible negative effects of inter-jurisdictional tax competition and aggressive tax planning by multinational companies on state’s tax revenue may lead to a shift of the tax burden onto less mobile activities and onto consumption in order to keep a state’s public finances stable. In the end a jurisdiction’s tax system may become distorted (inefficient) and distribution unfair. In order to neutralize the negative effects of harmful tax competition and aggressive tax planning, one might be of the opinion that integrating company taxes within the EU would be the only way forward.