EU and Swedish Corporate Taxation

In order to reach decisions on corporate tax law, the EU stipulates a unanimity requirement. In effect, this means that each of the member states has a veto on such decisions. For several decades, the EU did not decide on much legislation in the field of corporate taxation. A few directives were issued, but after much debate and considerable time, primarily the parent/subsidiary directive, the merger directive and the interest/royalties directive.

The Commission did put forward proposals for new common legislation, for example on a Common Consolidated Corporate Tax Base (CCCTB). But it was not possible to reach the necessary unanimity. However, EU law has had a considerable impact on the corporate tax law of the member states through the fundamental freedoms of the Treaty on the Functioning of the EU (TFEU).

It is primarily the free movement of persons, services and capital, and as a broad reference also the free movement of goods, that has had an impact on the design of the corporate tax law of the member states. In several hundred cases, the European Court of Justice (ECJ) has decided that national corporate tax law was in breach of fundamental freedoms.

The report is a publication within the SNS research project “Taxes in a Globalised World”.