International Tax Competition: The Times They Are a-Changin'

For many years, countries from all over the world have attempted to attract investments by multinational companies through tax breaks and fiscal advantages of all sorts. More recently, however, some international tax competition practices have faced increasing hostility. In the US, for instance, political opposition has prompted Amazon to give up $3 billion in promised tax breaks for its planned HQ2 in New York. In the European Union, instead, it is the European Commission that has taken the lead against the tax advantages granted by some EU Member States to lure in multinationals. The European Tax Rulings Saga comprises a number of decisions by the European Commission enjoining certain EU Member States to recover over €15 billion of fiscal aids allegedly granted to multinationals such as Amazon, Apple, FIAT, and Starbucks in the form of “advance tax rulings”. Those decisions have all been appealed before the Court of Justice of the European Union. The outcome of those appeals will likely set an important precedent in the field of corporate taxation both within and beyond the EU.