The Role of the Anti-Tax Avoidance Directive in Restoring Fairness – A Proper Step towards Ensuring Sustainability of the International Tax Framework?

Published in C. Brokelind, S. van Thiel (Eds.), Tax Sustainability in an EU and International Context, IBFD 2020.

Copenhagen Business School, CBS LAW Research Paper No. 1939

26 Pages Posted: 25 Nov 2019 Last revised: 27 Nov 2020

Date Written: November 24, 2019

Abstract

The author discusses whether the EU Anti-Tax Avoidance Directive (ATAD) may be expected to promote tax fairness and thereby contribute to increased sustainability of the international tax regime. A legal (juridical) approach to tax fairness is followed, which entails that the provisions of the ATAD are examined in light of the principles of legitimacy, certainty and equality. Even though the ATAD suffers from shortcomings with respect to legitimacy and legal certainty, it is argued that the adoption of the ATAD is an important step forward and a preferred solution compared to the alternative of (some) member states unilaterally introducing new anti-avoidance rules or strengthening existing ones. Against this background, it is concluded that the ATAD must be expected to bolster the overall resilience of the corporate tax systems of member states towards aggressive tax planning and prevent loss of tax revenue. Furthermore, as the ATAD curtails MNEs’ possibilities for taking advantage of aggressive tax planning, the ATAD must be expected to promote a more level playing field, leading to increased tax equality and a more sustainable international tax regime.

https://www.ibfd.org/IBFD-Products/Tax-Sustainability-EU-and-International-Context

Keywords: EU Anti-Tax Avoidance Directive, tax fairness, legitimacy, legal certainty

JEL Classification: K34, H26, H29

Suggested Citation

Koerver Schmidt, Peter, The Role of the Anti-Tax Avoidance Directive in Restoring Fairness – A Proper Step towards Ensuring Sustainability of the International Tax Framework? (November 24, 2019). Published in C. Brokelind, S. van Thiel (Eds.), Tax Sustainability in an EU and International Context, IBFD 2020., Copenhagen Business School, CBS LAW Research Paper No. 1939, Available at SSRN: https://ssrn.com/abstract=3492643

Peter Koerver Schmidt (Contact Author)

Copenhagen Business School - CBS Law ( email )

Porcelaenshaven 18B, 1 floor
Frederiksberg 2000
Denmark

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