Adina Trandafir

Fiscal Equalization in Corporate Taxation -— A Way of Limiting the Harmful Tax Competition in the EU

EU endeavored in harmonizing and coordinating taxes in order to eliminate or limit the harmful tax competition that affects most Member States companies. Tax base equalization seems to be the right way towards fiscal equalization. However, tax competition is the result of the worldwide mobility of tax bases, companies and financial assets. This mobility was not generated only by technological innovations in transport and telecommunication, but was mostly influenced by political decisions such as liberalization and deregulation. This paper addresses the issue of eliminating harmful tax competition through fiscal equalization, by adopting the CCCTB system. Under these circumstances, tax competition would be limited only to the tax rates applicable in the 27 EU Member States.