EU Audit Report: Combatting harmful tax regimes and corporate tax avoidance

The fight against harmful tax regimes and corporate tax avoidance has become a particularly pressing issue because of increased globalisation. Harmful practices have adverse effects, such as the erosion of foreign tax bases or the unfair distribution of tax burdens. The situation is also an issue in the EU, where such adverse effects can lead to significant tax losses for member states and distortions in the single market. The ECA has undertaken a comprehensive audit to examine how the EU framework addresses these issues, and will make recommendations about how the EU can continue to combat adverse practices more effectively.

The audit covers three key EU legislative acts and other instruments, including the Anti-Tax Avoidance Directive, the 5th amendment to the Directive on Administrative Cooperation (DAC 6), and the Directive on Tax Dispute Resolution Mechanisms, as well as the legally non-binding EU Code of Conduct for business taxation. The auditors looked closely at the European Commission’s work and at five member states: Ireland, Cyprus, Luxembourg, Malta and the Netherlands. The audit does not cover state aid for corporations, or bilateral agreements between companies and governments.​​​

The report and press release will be published on the ECA’s website (eca.europa.eu) at 5.00 p.m. CET on Thursday 28 November 2024. The ECA Member responsible for this report is Ildikó Gáll-Pelcz.

The ECA’s special reports set out the results of its audits of EU policies and programmes or management topics related to specific budgetary areas. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks to performance or compliance, the level of income or spending involved, forthcoming developments and political and public interest.​