Steuerdumping in der erweiterten EU?
Tax Dumping in Enlarged Europe?

Summary/Abstract: The article of the Minister of Finance of the German Federal State of Bavaria refers to the present discussion on “tax dumping”. The latter has been provoked by the observation that many of the new EU member states (NMS) have considerably reduced their levels of corporate income tax in the course of their accession. Consequently, the effective tax burden on enterprises in Germany is nearly twice as high as compared to the average of the NMS. The author identifies a number of factors that counteract a fair tax competition. As an example, the NMS increasingly profit from EU regional funds, allowing them to further reduce corporate taxes. Germany, being the principal net payer to EU funds, is likely to contribute to the exodus of employment from Germany to the NMS through its payments. Faltlhauser further discusses measures that could help to prevent tax dumping and calls for a common policy of the EU members to fight it.

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