The status of corporate tax harmonisation in the EU with special reference to taxation issues relative to the European company (SE)

Abstract

In response to the changing needs of the world of commerce, Europe has moved increasingly towards the Single Market, with companies having to adapt their organisation on a European scale. However, as economic integration has deepened and widened, it has become increasingly clear that national corporate tax rules of the twenty-five Member States create obstacles to achieving a true Single Market. Furthermore, with the introduction of the European Company Statute, compames operating in two or more Member States of the EU, now have the opportunity to work within a framework of a single incorporated entity, reducing the cost and burden for companies of having to comply with different company law regimes. However, the absence of taxation aspects in the Statute, gives a further reason for the EU to address the problem of corporate taxation within the Community. Through the years, the EU implemented a number of initiatives aimed at resolving certain tax obstacles. However, the general need for a fundamental reform of company taxation is now one of the biggest issues dominating the EU tax arena. Several approaches for providing companies with a consolidated tax base for their EU-wide activities have been identified; namely: Home State Taxation, an optional Common Consolidated Tax Base, a European Company Tax, and a compulsory, fully Harmonised tax base. Given that Home State Taxation is seen as the most short-term possibility, this dissertation will focus specifically on this option.