Different tax regimes are known to exist between EU Member States. This affects the structure and tax rate. In the case of corporate tax, taxes also differ greatly from country to country, and in this area we can place the Netherlands, Ireland, Malta, Cyprus and Luxembourg in the category of tax havens. This gap is evidence of the European Union’s weakness in taxation and is one of the main weaknesses for EU cohesion. At present, the European welfare state is rewarding that corporate tax revenues are getting lower and lower. In this direction, there is a tendency for top-down tax competition between Member States, which has led the European Commission to express its concern and to call for some harmonisation.

In this regard, the decision of a business emblem of the Spanish State, Ferrovial, to transfer its seat to the Netherlands has been well known. The main reason given, the legal uncertainty of the State, is incredible and it has become clear that the tax reduction has been the main cause of the movement. This company is led by an elite born in the state and, being a historical beneficiary of this state, the decision has generated a great stir. This change of headquarters with multiple vertices calls into question the sustainability of a certain welfare regime of European states. Indeed, in the world economy, the power of transnational corporations prevails over that of most States.

Ferrovial defends the fiscal weakness of the European Union. On the road to economic and social cohesion in Europe, the failure to take joint steps in taxation is a serious barrier. The countries mentioned initially benefit from this gap. These countries, following a low tax model, tend to attract businesses, increasing tax revenue and employment, damaging their Member States. An estimate by Oxfam states that the Dutch tax system generates a hole of EUR 22 billion per year for the other states of the world. Profits diverted by transnational corporations to tax havens caused the Spanish State to lose at least €4 billion in 2019 and the French State €4.6 billion in the same year (a study by the French Senate raised this loss to €30-36 billion by 2022).

Along the same lines, American giants (Apple, Google, Intel, Meta and Pfizer) have installed the European headquarters in Ireland to reduce the tax burden. Ireland doubles the size of its economy with fiscal dumping since 2014, while the GDP of the EU as a whole is growing by 23%, according to Eurostat data.

The reality of tax dumping and tax evasion is so untenable that the very chairman of the financial committee, Paolo Gentiloni, announced two years ago the launch of a plan to establish a common corporation tax in the EU. Clearly, this has not yet been done.

If there is no tax harmonisation, tax dumping between states will be maintained for the benefit of large and transnational companies and to the detriment of territorial and social cohesion. The existence of a single currency in the euro area, without a single tax system, runs counter to economic logic, both in terms of efficiency and economic viability. And this could end welfare and social cohesion.