Professional paper

HARMONIZATION OF DIRECT TAXES WITHIN EU

Luka Kuvač ; Odvjetnički ured Elen Kuvač, Šibenik, Hrvatska

Abstract

From the foundation of EU up to now only very little has been achieved in the fi eld of the harmonization of direct taxes. Arriving at the area of EU the multinational companies have started to use the unevenness of tax regulations among the EU members and they have begun to bring their own capital to the area of a member state with a lower profi t tax. One of the fi rst directives issued in the area of EU regarding the harmonization of direct taxes is the Directive of EU European Council about the common taxation system being applied to basic companies and their subsidiaries coming from different member states, known under a short name: the directive basic company – subsidiary. The fi rst
and the second part of this paper are dealing with the harmonization of direct and indirect taxes in the area of EU, a legal base, the ways and problems the EU institutions face during the harmonization hereof. The second part of the paper deals with the directives issued in the fi eld of the harmonization of direct taxes by EU institutions. The third part of the paper explains the tax competition and the unwanted eff ects hereof, appearing when certain member states, due to the withdrawal of investments, reduce the profi t tax rates below the optimal level. The fourth part of the paper describes a historical development, the amendments to the Directive of EU European Concil about the common
taxation system being applied to basic companies and their subsidiaries coming from diff erent member states, thus being the strongest instrument of a fi ght against the detrimental eff ects of the
tax competition in EU.

Keywords

tax harmonization; direct taxes; profit tax; multinational companies; hybrid loan; directive basic company – subsidiary

Hrčak ID:

142323

URI

https://hrcak.srce.hr/142323

Publication date:

23.7.2015.

Article data in other languages: croatian

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