Bespoke tax rulings and profit shifting in the European Union: assessing the EU’s options

Shafi U Khan Niazi, Rick Krever

Research output: Contribution to journalArticleResearchpeer-review


Widely publicised profit-shifting cases in Europe against multinationals such as Starbucks, Fiat, Apple and Amazon have caught the attention of Australian scholars and tax officials with the revelation of the direct involvement of Australian subsidiaries such as Apple in the arrangements. The profit-shifting arrangements in question are all based on favourable private rulings from tax authorities in a select group of European countries. While in theory
European Union (EU) authorities have three potential weapons that can be used to attack the arrangements, to date, the European initiatives to attack the profit-shifting schemes have
focused on one primarily, the EU prohibition against state aid. This article reviews the options EU officials seeking to combat profit shifting arrangements. The experience to date reveals the limitations to the ability of tax authorities in Europe and Australia to curb profit-shifting arrangements so long as the global system of profit allocation rests on a conceptual
foundation of fictional transactions between parts of a single economic entity.
Original languageEnglish
Pages (from-to)347-368
Number of pages22
JournalAustralian Tax Forum
Issue number3
Publication statusPublished - 2021


  • International tax avoidance
  • Transfer pricing
  • Tax rulings
  • Profit shifting
  • European Union
  • European tax law

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