FDI Implications of Recent European Court of Justice
Decisions on Corporation Tax Matters
Frank Barry
Trinity College Dublin
and
Rosemary Healy-Rae
Barrister-at-Law
November 2008
Abstract
Corporation tax rates significantly influence the location of foreign direct investment
(FDI) as well as company decisions on corporate borrowing, transfer pricing,
dividend and royalty payments, and research and development. While direct taxation
remains within the competence of individual EU member states, the European Court
of Justice (ECJ) has faced an increasing number of corporation-tax-related cases over
recent years and its judgements have significantly redrawn the European tax
landscape. The present paper reviews and synthesises these ECJ decisions and
analyses their implications for the FDI decisions of Multinational Corporations.
Corresponding author: [email protected]