Legal mechanism of avoiding double taxation in the European Union

Abstract

The article titled “Legal Mechanism of Avoiding Double Taxation in the European Union” provides a comprehensive examination of the intricate legal framework established within the European Union (EU) to tackle the pervasive issue of double taxation.

The contemporary landscape of the European Union is characterized by a dynamic and interconnected economic environment, fostering a thriving cross-border business ecosystem. However, this vitality often encounters significant impediments in the form of double taxation, where individuals or entities are subject to taxation in multiple EU member states for the same income or transaction. Double taxation not only creates administrative burdens but also undermines the seamless operation of the EU’s internal market.

The article provides a comprehensive understanding of double taxation, delineating its various forms. It highlights the potential consequences of double taxation on businesses and individuals, such as reduced competitiveness, disincentives for foreign investment, and impediments to economic growth within the EU etc.

Against this backdrop, the article delves into the central theme of the legal mechanisms implemented by the European Union to combat double taxation. It recognizes that while taxation is primarily within the purview of individual member states, the EU has intervened with a series of directives, treaties, and judicial rulings to harmonize and streamline tax practices.

The article “Legal Mechanism of Avoiding Double Taxation in the European Union” explores the complex and crucial issue of double taxation within the EU. It delves into the various legal instruments, directives, and tax treaties that have been established to prevent or mitigate double taxation, which can arise when individuals or businesses are subject to taxation in multiple EU member states. The article provides insights into key EU directives, bilateral tax treaties, European Court of Justice practice etc.