Fiscal Dumping

Fiscal Dumping in Europe

Description of Fiscal dumping

The Concise Encyclopedia of the European Union describes fiscal dumping in the following terms: [1] The charge of attracting trade or investment ‘unfairly’ by virtue of ‘harmful’ or ‘predatory’ (that is, lower) taxes. Like ‘social dumping’, the phrase suggests a desire on the part of Europe’s high-cost economies to level up costs within the Eu (see more in this European encyclopedia). The chief targets include Ireland, Spain, Belgium and The Netherlands, which give special tax incentives to international companies, and Luxembourg, which is a comprehensive tax haven. The UK, too, as a country with a relatively benign tax regime, is not immune from attack. Offshore dependencies, such as the Channel Islands, are singled out for special opprobrium.

The Community’s competence in the fiscal area had hitherto been regarded as covering only indirect taxes, but in 1997 the Commission drew up plans for a voluntary code of conduct aimed at countries with a ‘significantly lower than average’ business tax rate (see more in this European encyclopedia). This move was portrayed as a single marketmeasure, justifying intervention by Brussels in a field previously reserved for national governments. (See also Harmonisation and Tax.)

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Notas y References

  1. Based on the book “A Concise Encyclopedia of the European Union from Aachen to Zollverein”, by Rodney Leach (Profile Books; London)

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