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Lecture | Online

EU and Tax Sovereignty: Discussing the Role of the EU in International Tax Law Making

Wednesday 25 November 2020
Diplomacy and Global Affairs Research Seminar Series 2020
Online via Teams (Code: mfn7eno)


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About the lecture

This presentation will focus on the changes to the role of the EU in taxation of multinationals since the 2008 financial crisis and how this role affects the concept of tax sovereignty in EU countries and third (non-EU) countries. Following this analysis, this presentation will address: the conditions under which this new role can be legitimate with respect to EU and third (non-EU) countries?

Since the 2008 financial crisis, the OECD, G20 and the EU have addressed the need to tackle tax planning strategies by multinationals and wealthy individuals that result in a shifting of profit to places where there is little or no economic activity. Examples of artificial profit shifting by multinationals are the tax scandals of Apple, Google, Starbucks, and Amazon. In addition, in some EU countries (e.g. the Netherlands, Belgium, and Luxembourg), multinationals have been able to conclude agreements (tax rulings) with the tax administrations in order to approve such corporate tax strategies. 

Countries and organizations such as the OECD and the EU have come up with unilateral and multilateral solutions to tackle corporate tax structures that result in artificial profit shifting. At EU level, the EU Commission introduced in 2016 an anti-avoidance package including an Anti-Avoidance Directive applicable to EU and third (non-EU) countries and an External Strategy introducing the standard of good tax governance in economic and trade agreements concluded by the EU with third (non-EU) countries. This anti-avoidance package has raised tensions about legitimacy and fairness since it limits the sovereignty of EU countries to introduce their own set of rules and requires  third (non-EU) countries to adhere to the EU standard of good governance and fair competition as a condition to conclude   agreements with the EU. Another EU initiative that has also generated tensions is the state aid investigations by the European Commission of tax rulings concluded by EU countries with multinationals. According to the Commission these rulings resulted in undue tax benefits under the EU state aid rules which affect the level playing field of business in the EU.

About the speaker

Irma Mosquera is Associate Professor at the Faculty of Law, Leiden University, the Netherlands. She is the Lead Researcher of the project GLOBTAXGOV which investigates international tax law making by the OECD, G20 and the EU. This project has received a Starting Grant from the European Research Council (2018-2023).  She is a frequent speaker on topics of tax policy making and global tax governance .She has published several articles in international and EU journals. On the topic of her presentation, she has recently published in 2020 in the German Law Journal: A new wind change in direct taxation and in 2019 in Intertax: The EU Standard of Good Governance in Tax Matters for third (non-EU) countries.

About the seminars

The Diplomacy and Global Affairs (DGA) Research Seminar is a series launched by the Research Group on Diplomacy and Global Affairs at the Institute of Security and Global Affairs. The seminars of internationally acknowledged guest researchers and faculty members deal with current research topics in diplomacy, international relations, global affairs, and political economy broadly conceived and target a broad audience through their interdisciplinary focus.


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