Combatting harmful tax regimes and corporate tax avoidance – The EU has established a first line of defence, but there are shortcomings in the way measures are implemented and monitored

Summary:

This report examines the EU efforts to combat harmful tax regimes and corporate tax avoidance, which can lead to significant tax losses for member states and distortions in the internal market. Within its limited competences in the area of direct taxation, the EU adopted a legal framework and uses supporting instruments as a first line of defence against systemic harmful tax practices. However, we identified shortcomings in how the rules were implemented and noted the absence of a common performance monitoring framework at EU and national level. We recommend ways to improve the Commission’s oversight and close existing loopholes, thus helping it to tackle these harmful tax practices, and provide enhanced support to member states to ensure consistent application of the legislation.

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