BEFIT and EU Tax Harmonisation: Legal Frameworks, Challenges, and Implications for Harmful Tax Competition
Hiisikero, Annika (2025-05-12)
BEFIT and EU Tax Harmonisation: Legal Frameworks, Challenges, and Implications for Harmful Tax Competition
(12.05.2025)
Julkaisu on tekijänoikeussäännösten alainen. Teosta voi lukea ja tulostaa henkilökohtaista käyttöä varten. Käyttö kaupallisiin tarkoituksiin on kielletty.
avoin
Julkaisun pysyvä osoite on:
https://urn.fi/URN:NBN:fi-fe2025052251183
https://urn.fi/URN:NBN:fi-fe2025052251183
Tiivistelmä
For much of the past century, the European Commission has sought to establish a comprehensive framework for tax harmonisation in corporate taxation. Despite numerous efforts, including the notable Common Consolidated Corporate Tax Base (CCCTB), these initiatives have encountered persistent resistance from Member States, ultimately resulting in their failure. In 2023, the Commission unveiled its latest proposal—Business in Europe: Framework for Income Taxation (BEFIT).
This thesis dives into one of the EU’s most important challenges: finding ways to reduce harmful tax competition while creating a cohesive corporate tax system among its Member States. BEFIT is central to this exploration, designed to reshape the EU’s fragmented tax landscape. By harmonising the corporate tax base, BEFIT offers the potential to diminish profit-shifting, improve legal clarity, and ensure fair competition in the EU’s single market.
The study employs doctrinal methodologies, focusing on the relevant provisions of the Treaty on the Functioning of the European Union (TFEU), particularly Articles 113 to 115, as well as broader legal principles that have consistently shaped EU tax policy. By examining diverse academic and legal resources, the research evaluates BEFIT’s capacity to transform tax coordination while confronting major political and legal obstacles, for example, the unanimous consent needed in direct taxation.
The findings indicate that BEFIT represents an initial move against harmful tax competition; however, the enduring influence of national tax rates and political opposition limits its effectiveness. Legal limitations and the difficulty of reconciling various political priorities within the EU hinder the proposal's full potential.
In conclusion, this thesis highlights that while BEFIT is a starting point, there’s room for further refinement for it to become effective. BEFIT has the potential to become the cornerstone of a more unified corporate tax system, but this will depend on the EU's ability to navigate the intricate political landscape and tackle its multilevel challenges.
This thesis dives into one of the EU’s most important challenges: finding ways to reduce harmful tax competition while creating a cohesive corporate tax system among its Member States. BEFIT is central to this exploration, designed to reshape the EU’s fragmented tax landscape. By harmonising the corporate tax base, BEFIT offers the potential to diminish profit-shifting, improve legal clarity, and ensure fair competition in the EU’s single market.
The study employs doctrinal methodologies, focusing on the relevant provisions of the Treaty on the Functioning of the European Union (TFEU), particularly Articles 113 to 115, as well as broader legal principles that have consistently shaped EU tax policy. By examining diverse academic and legal resources, the research evaluates BEFIT’s capacity to transform tax coordination while confronting major political and legal obstacles, for example, the unanimous consent needed in direct taxation.
The findings indicate that BEFIT represents an initial move against harmful tax competition; however, the enduring influence of national tax rates and political opposition limits its effectiveness. Legal limitations and the difficulty of reconciling various political priorities within the EU hinder the proposal's full potential.
In conclusion, this thesis highlights that while BEFIT is a starting point, there’s room for further refinement for it to become effective. BEFIT has the potential to become the cornerstone of a more unified corporate tax system, but this will depend on the EU's ability to navigate the intricate political landscape and tackle its multilevel challenges.