What impact does the EU have on International Tax Law?

The European Union (EU) has a significant impact on tax law internationally. The EU has its own body of tax laws, known as the European Union Directive on the Common System of Taxation. This Directive establishes the basic framework for the taxation of income and capital in the EU. It sets out the general principles, parameters, and rules for taxes on income and capital, as well as certain exemptions which apply to certain taxpayers. The EU also works to ensure that its Member States do not discriminate against each other in the area of taxation. This is done by following the principles of "direct effect" and “indirect effect”. Under direct effect, the EU laws have direct legal force in the EU Member States, and the EU can directly intervene in any conflicts between the Member States over the interpretation and application of those laws. Under indirect effect, the EU must ensure that similar effects are achieved across all Member States when calculating their tax obligations. In addition, the EU has a huge impact on the international taxation of its Member States. The EU works to ensure that all of its Member States are able to benefit from the same tax advantages, while still maintaining their sovereignty over taxation. This is done by setting high standards by way of the EU regulations on taxation to provide uniformity and consistency in the taxation of Member States. Therefore, the EU has an important role to play in the enforcement of International Tax Law, both in its Member States and across the world. As such, it is essential to understand the principles and policies of the EU Directive on the Common System of Taxation, and its implications for the international taxation of income and capital.

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