Better taxation for healthier economies
Globalisation has brought with it many opportunities, but also challenges for governments and investments arising from cross-border taxation. This implies a need for new tax cooperation mechanisms and a rethink of national fiscal sovereignty policies. The EU-funded ITC (International Tax Coordination) project investigated international tax coordination within a regional context and with respect to economic integration among countries. It highlighted the importance for the EU to cooperate with third countries and examined how to address conflicts in international tax law. Topics investigated cover taxing rights and taxing powers, corporate tax consolidation, value-added tax (VAT), consumption tax, double taxation and non-taxation. After the looking at tax policy of developing countries, ITC also conducted an in-depth study on ways to improve distinction between debt and equity, and to facilitate their categorisation in the EU. The project studied the legal framework in Australia, Austria, Chile and Sweden to articulate solutions to worldwide taxation challenges. Specific issues that the project team looked at include VAT laws between the EU and Chile, as well as the introduced Australian Carbon Tax as an example of environmental tax schemes. Overall, the project team showed how double taxation in direct and indirect taxation can harm international trade. It recommended more intensive research for developing solutions to such global problems. ITC has strongly encouraged the development of better tax law frameworks in non-European countries to their benefit and to the benefit of the EU. On the European front, this will contribute to enhancing the European Research Area and increasing overall competitiveness in the bloc. The project’s results in this respect will be a valuable tool in achieving these aims.
Keywords
Fiscal sovereign policies, economic integration, corporate tax, double taxation, international trade
