Tax Cooperation from a European Perspective – How the EU Steps Towards Joint Regulation in Corporate Tax Policy

Over the last decade, research on tax governance generally has emphasized the difficulty and unlikelihood of international cooperation in tax matters. This literature has worked from national or global perspectives, focusing on either resistance from powerful nation states and interest groups or the failed efforts of international organizations, such as the OECD. Important developments at the regional level, specifically in the EU, including the introduction of country-by-country reporting, automatic exchange of information, general anti-abuse rules, public access to information on beneficial ownership, and the relaunch of the Common Consolidated Corporate Tax Base, were at best mentioned briefly but not investigated in a comprehensive manner. This paper proposes to close this gap and argues that the European experience highlights the possibilities and limitations of cooperation against tax evasion and avoidance. In contrast to the prominent “no-taxation thesis”, we believe that the EU is increasingly gaining influence over taxation and that the series of recent measures against corporate tax avoidance represent a substantial shift in EU tax policy. The study is based on a chronological review of EU corporate tax provisions since 2003 and a computer-based content analysis of 917 official documents published by the European Commission and the Council of the European Union between 2003 and 2017. Referring to this sequential analysis, the paper shows that EU corporate tax policy has recently undergone a significant change that happened on two different levels. On the operative level, we can observe a quantitative and qualitative intensification of the European regulatory efforts against tax avoidance, which sharply contrasts with the pre-crisis status-quo. This development came along with a change on the discursive level, whereby new dimensions such as transparency, fairness and corporate responsibility, have been added to the EU discourse on tax matters. Moreover, our findings also suggest that this change did not happen directly after the financial crisis but rather since the end of 2012 and beginning of 2013, hence relativizing the potential impact of the financial and sovereign debt crisis. Therefore, we propose to discuss other explanations for this change, such as the interrelationship between the EU and the OECD, the role played by several prominent tax scandals, and the entrepreneurship of the European Commission.