In his view, “European fiscal policy is playing its part in supporting the OECD’s base erosion and profit-shifting action plan by endeavoring to eliminate tax obstacles to cross-border economic activities in the European Union, tackling cross-border tax evasion and avoidance, and addressing the challenges of globalization, such as taxing the digital economy” (p. 65).
To mention an example, in order to tackle double taxation, the Commission recommends “the member states renegotiate their treaties in order to include an arbitration clause and thereby ensure that mutual agreement procedures lead to a binding solution” or alternatively proposes “an EU directive that would provide for an arbitration clause that would solve disputes when the member states can- not agree on the application of a treaty. The suggestion is to use the mutual agreement procedure first and if no solution is reached within two years, the taxpayer can request binding arbitration. This would provide a uniform procedure within the EU and also cover situa- tions involving more than two member states (triangular situations)” (p. 67).
Tom also highlights that “The commission has also been proactive in bringing infringement cases against member states whenever national tax rules fail to comply with EU law, and it regularly challenges national tax rules that are incompatible with the state aid rules of the Treaty on the Functioning of the European Union (TFEU). Consequently, national tax regimes must be amended to en- sure full compliance with EU law” (p. 66).
I strongly recommend reading the full article. Many thanks, dear Tom, for this new contribution.