EU Tax Law Guide

The 2024 EU Tax Law Guide

The EU Tax Law Guide provides a good overview of the European Union (EU) taxation system. It is designed to cover a range of topics, from general and international taxation in the EU to specific issues such as transfer pricing, indirect taxation, tax litigation, tax evasion and avoidance, policy advocacy, digital economy taxation, the role of Pillar 2, Base Erosion and Profit Shifting (BEPS), and tax policy development. It also discusses the importance of education and training in tax law, with a particular focus on the contributions of Dr. Erasmus and the I/I/T/F Academy of Tax Law.

General Taxation and Understanding Taxation in the EU

The EU does not directly collect taxes or set tax rates. Instead, the amount of tax each citizen pays is decided by their national government. However, the EU oversees national tax rules in some areas, particularly about EU business and consumer policies, to ensure the free flow of goods, services, and capital around the EU, and to prevent businesses in one country from having an unfair advantage over competitors in another.

Tax policy in the EU has two components: direct taxation, which remains the sole responsibility of Member States, and indirect taxation, which affects the free movement of goods and the freedom to provide services in the single market. The EU has established some harmonised standards for company and personal taxation, and member countries have taken joint measures to prevent tax avoidance and double taxation.

The main priorities for EU tax policy are the elimination of tax obstacles to cross-border economic activity, the fight against harmful tax competition and tax evasion, and the promotion of greater cooperation between tax administrations. Taxation is one of the key policies monitored through the European Semester, the yearly cycle of economic policy coordination.

International Taxation and the EU

Cross-border tax issues are a significant aspect of EU taxation. The EU has implemented several directives to facilitate administrative cooperation in the field of taxation and to prevent tax evasion and avoidance. These directives provide for the exchange of information between tax authorities and establish procedures for resolving disputes related to the interpretation and application of tax treaties.

The CJEU plays a crucial role in interpreting and enforcing these directives. In joined cases C-245/19 and C-246/19, the CJEU issued decisions on the cross-border exchange of information between tax authorities, clarifying the rights of taxpayers in such situations.

Transfer Pricing and the EU

Transfer pricing regulations and enforcement have become a major tax compliance issue in the EU. The Transfer Pricing Forum, an expert group created by the European Commission, aims to reduce compliance costs and avoid double taxation in cross-border inter-group transactions. The EU has been working to harmonize transfer pricing rules within the EU, ensuring a common approach to transfer pricing problems.


The Complexities of Indirect Taxation in the EU

Indirect taxes include value-added tax (VAT) and excise duties on alcohol, tobacco, and energy. The EU coordinates and harmonizes VAT law and harmonizes duties on alcohol, tobacco, and energy to ensure the proper functioning of the internal market. The common VAT system is generally applicable to goods and services that are bought and sold for use or consumption in the EU.

Tax Litigation in the EU

Tax litigation in the EU can be complex due to the different tax systems and regulations across member countries. Tax controversies can arise from complex legislation, different compliance requirements, and multi-jurisdictional transactions. Engaging with tax authorities early and understanding the effects of tax proposals can help businesses navigate these complexities.

Dr Erasmus and his team have extensive knowledge and experience in handling tax litigation and controversy work, making them a valuable asset for multinationals, organizations, and medium-sized enterprises navigating these complexities.

Tax Evasion and Avoidance in the EU

The EU has taken significant steps to combat tax evasion and avoidance, including the adoption of the Anti-Tax Avoidance Directives (ATAD I and II). These directives introduce measures to prevent base erosion and profit shifting, such as controlled foreign company rules, exit taxation rules, and rules on hybrid mismatches.

Policy Advocacy and Cross-Border Tax Planning

The EU is working to coordinate ways to shore up international tax rules and shut down base erosion and profit shifting (BEPS). International companies doing business with and within EU Member states will need to deal with an unsettled and dynamic tax environment for years to come.

Digital Economy Taxation

The digital economy presents new challenges for taxation in the EU, as the line between taxable and non-taxable items may not always be clear, and their treatment may vary from country to country. Multi-jurisdictional and digital transactions add to the increasing complexity of consumption taxes.

The Role of Pillar 2 in Europe

Pillar 2 is part of the OECD/G20 Inclusive Framework on BEPS, which aims to ensure that multinational enterprises pay a minimum level of tax. The EU is actively participating in the development and implementation of the global minimum tax to ensure a fair and efficient international tax system.

Base Erosion and Profit Shifting (BEPS) and the EU

BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to shift profits to low or no-tax locations. The EU has been at the forefront of efforts to combat BEPS, implementing a range of measures in line with the OECD/G20 BEPS project. These include rules on hybrid mismatches, controlled foreign companies, and interest limitation rules.

Tax Policy Development

Tax policy development in the EU involves a complex interplay between EU institutions, member states, and stakeholders. The European Commission plays a central role in proposing new tax legislation, but these proposals must be approved by the Council of the EU and, in some cases, the European Parliament. Stakeholders can influence tax policy development through consultation processes and direct engagement with policymakers. 

Education and Training

Education and training are essential for understanding and navigating the complex world of EU tax law. Dr. Erasmus, as the head of academics at the I/I/T/F Academy of Tax Law, has made significant contributions in this area, developing a range of courses and resources for tax professionals. These resources provide a deep understanding of EU tax law and equip professionals with the skills they need to advise businesses and influence policy. Please the  I/I/T/F Academy of Tax Law website to view all the available Postgraduate Programmes –

Why should you engage with Prof Dr Erasmus and his team?

Understanding EU tax law is crucial for businesses operating in the EU and for the professionals who advise them. The EU Tax Law Guide has provided an overview of key aspects of EU taxation, from general and international taxation to specific issues such as transfer pricing, indirect taxation, tax litigation, tax evasion and avoidance, policy advocacy, digital economy taxation, the role of Pillar 2, BEPS, and tax policy development.

Dr. Erasmus, with his extensive knowledge of tax litigation, tax controversy work, transfer pricing, and international taxation, can play a crucial role in assisting multinationals, organizations, and medium-sized enterprises in navigating the complexities of EU taxation.