Expert Statement by ZEW Economist Professor Katharina Finke on the European Commission's Action Plan to Reform Corporate Taxation in the EU

The European Commission presented its Action Plan for fair and efficient corporate taxation in the EU on June 17, 2015. According to Professor Katharina Finke, deputy head of the "Corporate Taxation and Public Finance" Research Department at the Centre for European Economic Research (ZEW), it is questionable whether the EC Action Plan will successfully curtail the fundamental problem of tax avoidance by multinationals in Europe:

"By setting up this action plan, the EU Commission draws on its 2011 proposal of a Common Consolidated Corporate Tax Base, thereby working towards a fundamental reform of corporate taxation. This is a welcome initiative. The obligatory introduction of this idea among EU Member States will reduce the costs of tax planning. The two-step implementation process facilitates political feasibility. However, doubts remain whether the second step will actually follow the first one. But it is the second step that is necessary to effectively prevent profit shifting, for example by means of transfer prices or debt financing."

For further information please contact

Prof. Dr. Katharina Finke, phone: +49 (0)621 1235 397, E-mail: finke@zew.de