TAXATION OF MULTINATIONAL ENTERPRISES OPERATING IN THE EUROPEAN UNION
TAXATION OF MULTINATIONAL ENTERPRISES OPERATING IN THE EUROPEAN UNION

Summary/Abstract: Despite generally operating as unified entities, Multinational Enterprises are not treated as single entities for tax purposes. This leads to income being taxed separately in each country an MNE operates in, giving rise to both challenges and unfair advantages for MNEs, specifically within the European Union, where there is both a desire for a single market, as well as one for maintaining sovereignty over corporate tax policies of each Member State. To address these challenges, the EU has attempted working on several reforms, including initiating the Common Consolidated Corporate Tax Base (CCCTB) and supporting the OECD’s BEPS Projects. The CCCTB aims to harmonize corporate taxation across the EU, simplifying tax calculations and reducing profit shifting. On the other hand, the OECD’s Two-Pillar Project addresses the tax challenges of digitalization and globalization by reallocating taxing rights to market jurisdictions and introducing a global minimum tax rate. This paper aims to analyse the successes and failures of these initiatives in order to explore potential solutions to create a fairer and more sustainable global tax system.

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