This chapter reviews recent theoretical work on the effect of factor mobility and the ensuing tax competition on the capacity of governments to raise revenue and redistribute income. It focuses on three issues: the relevance and limitations of the race to the bottom result, the benefits and...

Preface --Introduction --State aid decisions and open formal investigations concerning the tax ruling practices of member states --Arm's length principle --Recovery, legitimate expectations and legal certainty --EU competences --International practices and the OECD --The way forward.

Through the arguments for corporate tax harmonization in the EU and describing the current stage of this process, the legislative rules which are insufficient to solve the many problems implied by the proper functioning of the Single Market, are revealed. The book also exposes the issues...