Aggressive tax planning and EU state aid law

In recent years, some of the largest multinationals have attracted significant attention for minimising their tax burden via so-called aggressive tax planning (ATP) practices. Aggressive tax planning (ATP) is an umbrella concept, which covers a range of situations in which a taxpayer takes advantage of the technicalities of the tax system in order to reduce his tax liability. Studies have indicated that ATP has negative consequences for various stakeholders. For governments it results in a reduction of tax revenues, which puts a burden on public expenses and debt levels. In addition, the lost tax revenue will have to be paid indirectly by other taxpayers, which creates unfairness and competitive disadvantages. Lastly, ATP may lead to an inefficient allocation of resources by steering investment and employment decisions towards sub-optimal activities. Within the existing framework of EU law (i.e., free movement law and secondary EU (tax) law), the issue of APT is not (or not fully) resolved. Recently, the fight against ATP within the EU has been given a new impetus, with the main driver of this development being EU state aid law. Whilst it is clear that a new EU state aid framework for determining Member States’ competences to curb ATP is emerging, the boundaries and content thereof are still very much unclear, with many questions remaining unresolved or unexplored in legal doctrine. The proposed research aims to fill the gap by theorising an appropriate EU state aid law framework for determining the competences of the Member States to counter ATP.