Introduction to European Tax Law on Direct Taxation

I. S. 218Introduction

A. Background and Origins

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The fight against tax evasion and tax avoidance has attracted significant media attention over the past few years. The common man has developed an interest in this issue because of various factors, starting with the financial crisis in 2008, culminating in more recent and publicized instances of tax avoidance by multinational enterprises revealed through various media reports, the Luxemburg-Leaks (2014), the Swiss-Leaks (2015) and the Panama-Leaks (2016). In an attempt to multilaterally tackle this issue, at the behest of the G-20, the OECD released reports on 15 actions dealing with the fight against base erosion and profit shifting (BEPS) in 2013, which were ‘finalized’ in 2015. As countries work towards implementing the BEPS actions, the efforts of the EU toward coordinated action in this regard has assumed great significance.

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The implementation of measures against tax avoidance and aggressive tax planning is more challenging in the context of a common internal market, where especially the fundamental freedoms provide taxpayer protection. The danger of aggressive tax planning and tax avoidance has been recognized politically at the EU level...