Serie de derecho nº 19

This book analyses the degree of tax harmonisation required to protect the objectives of the European Community Treaty. The harmonisation of the tax connecting factors for companies improves the economic integration in the European Union without interfering significantly with the fiscal sovereignty of the Member States.

The challenge of harmonising the corporate tax laws of the Member States within the European Union is investigated. For this purpose the tax barriers and discriminations that the corporate tax laws of the Member States cause are explained and different alternatives to eliminate these barriers are explored.

It is argued that by obtaining minimum tax harmonisation most of the tax distortions created within the European single market could be solved. In particular, harmonising the concept of fiscal residence together with the application of a source-based tax system, fair distribution of revenue and legal certainty could all possibly be achieved. As a feasible alternative to the implementation of harmonised tax connecting factors in the corporate tax laws of the Member States, the tax connecting factors used by the Basque economic agreement, called Concierto Económico, signed with Spain is considered.