The European Union’s Fight Against Tax Avoidance and Harmful Tax Competition: Quo Vadis?

Tax base erosion is one of the most acute issues in tax policy worldwide. Within and in parallel to the OECD Tax Base Erosion and Profit Shifting (BEPS) project, in the last decade the European Union has issued a significant number of legal instruments with the explicit or indirect objective of tackling tax avoidance. The aim of this study is to provide a wider perspective of EU legislative actions on the subject. The paper critically examines the European framework on tax avoidance and focuses on three legal instruments: the Anti-Tax Avoidance Directive, the enforcement of state aid rules as a means of controlling state actions causing harmful tax competition, and the Minimum Tax Directive. In addition, pending and future legislative initiatives are discussed. It is concluded that the European Union is currently redefining its priorities on tax avoidance, and emphasis is placed on the simplification and effective enforcement of existing rules, rather than the introduction of new ones.