Bringing transparency, coordination and convergence to corporate tax policies in the European Union: Assessment of the magnitude of aggressive corporate tax planning

24-11-2015

This paper assesses the loss of tax revenue to the EU through aggressive corporate tax planning to be around 50-70 billion euro per annum. On an assumption of no base from sources other than profit shifting, then this figure jumps to 160-190 billion euro. The paper presents the methodology used and the country-by-country calculations on which these figures are based. It describes the common tools used in aggressive planning, and the impacts these have on tax revenue, concluding with an assessment of the inefficiencies created by individual tax arrangements for large multinational companies in the European Union. Research paper by Dr Robert Dover, Dr Benjamin Ferrett, Daniel Gravino, Professor Erik Jones and Silvia Merler has been written at the request of the European Added Value Unit of the Directorate for Impact Assessment and European Added Value, within the Directorate-General for Parliamentary Research Services (DG EPRS) for the European Parliament’s Committee on Economic and Monetary Affairs (ECON) in relation with the legislative own-initiative Report of Co-Rapporteurs Luděk Niedermayer and Anneliese Dodds, MEPs.

This paper assesses the loss of tax revenue to the EU through aggressive corporate tax planning to be around 50-70 billion euro per annum. On an assumption of no base from sources other than profit shifting, then this figure jumps to 160-190 billion euro. The paper presents the methodology used and the country-by-country calculations on which these figures are based. It describes the common tools used in aggressive planning, and the impacts these have on tax revenue, concluding with an assessment of the inefficiencies created by individual tax arrangements for large multinational companies in the European Union. Research paper by Dr Robert Dover, Dr Benjamin Ferrett, Daniel Gravino, Professor Erik Jones and Silvia Merler has been written at the request of the European Added Value Unit of the Directorate for Impact Assessment and European Added Value, within the Directorate-General for Parliamentary Research Services (DG EPRS) for the European Parliament’s Committee on Economic and Monetary Affairs (ECON) in relation with the legislative own-initiative Report of Co-Rapporteurs Luděk Niedermayer and Anneliese Dodds, MEPs.