International taxation and aggressive tax planning in European Union

Taxpayers who pay their tax on time may apply for tax avoidance practices within the criteria set out in the law. These practices, which are referred to as tax planning, can be conflicting with international legislative provisions and agreements. They can take the taxation process completely out in a cross-border scale. The positive impact of the tax planning is implementing such practices within the legal limits to decrease the tax burden and the tax savings from international tax transactions for taxpayers. Aggressive tax planning is defined as the practice of reducing or eliminating the tax burden differently for the purposes of applying economic and financial laws within the scope of international taxation. Because of its institutional structure, tax planning requires a more efficiency and coordination with both the national and international scale. The European Union (EU) is one of the international actors to fight aggressive tax planning practices carried out by multinational corporations and their affiliated companies of operating in the international area. As part of the EU harmonization process, measures have been developed by the EU Parliament and the ECON Committee on aggressive tax planning. The aim of the chapter is to examine the defects of international tax systems within the conceptual framework of aggressive tax planning and international practices and the national level competitive policies and tax planning techniques and mechanisms. In this context, it is observed that the international methods of struggle which is developed by the EU and the member countries' tax cooperation and harmonization process can be carried out more efficiently and the tax loss caused by aggressive tax planning can be prevented to a great extent. © Peter Lang GmbH. Internationaler Verlag der Wissenschaften. Frankfurt am Main 2017. All rights reserved