The Future of EU Tax Harmonisation

Abstract

Since the treaty of Rome, the European Union has been granted harmonization powers in the field of taxation. As for indirect taxes first and then direct taxes, directives have been adopted, mainly in order to facilitate free movement of taxpayers within the internal market and to fight against tax fraud and avoidance. Recent developments, such as the OECD BEPS initiative and the creation of a global forum on taxation issues, in particular relating to digitalization, Brexit and the financial and environmental crisis, along with the structural difficulty to reach unanimous agreement in key areas such as corporate taxation, are influencing the way tax legislation is proposed and passed at the EU level. At the eve of a new term for the European Commission, Council and Parliament, it may be time to re-think the purpose and the means of harmonization in the field of taxation. The morning session will address general issues such as the origin and purpose of EU harmonization, the current legal framework for the adoption of EU tax rules, in particular the principles of proportionality and subsidiarity and the peculiarities of the decision making process. Finally, the relationship between tax harmonization and the reform of the EU budget will be discussed. The second session will be devoted to corporate taxation, including its digital dimension. The possibility of a comprehensive harmonization of corporate tax along the lines of the CCCTB project will be assessed taking into account international developments. The other issues addressed in this session are the compatibility between the EU harmonization process (and more broadly EU law) and the BEPS project as regards the fight against tax avoidance and finally the potential harmonization a EU level of rules regarding digital economy