|Author (Person)||de la Feria, Rita, Fuest, Clemens|
|Series Title||European Law Review|
|Series Details||Vol.41, No.1, February 2016, p44-71|
|Publication Date||February 2016|
|Content Type||Journal | Series | Blog|
In order to assess the impact of the jurisprudence of the Court upon neutrality and a level playing-field, the decision in Lankhorst-Hohorst , regarding the compatibility of thin capitalisation rules with free movement provisions, will be used as case study.
An economic analysis demonstrates that, depending on the reaction of Member States to the ruling, tax induced differences in capital costs faced by firms operating within the European internal market may increase, while GDP and welfare may decrease. Consideration of actual legislative amendments introduced to thin capitalisation rules by Member States following Lankhorst-Hohorst appear to indicate that it is this negative scenario which has prevailed.
Results demonstrate that it is not always or necessarily the case that decisions of the CJEU will led to a more level playing-field and tax neutrality, thus contributing to the establishing of a genuine EU internal market. The article considers the constitutional implications of this conclusion, and the consequent breaking of the constitutional instrumental chain.
|Subject Categories||Law, Taxation|
|Countries / Regions||Europe|