This lesson introduces the key international and European institutions and legal instruments that shape national tax systems. It examines how global frameworks and EU law influence tax administration and taxpayer rights within member states.

In-depth Notes:

• The OECD’s Role: The Organisation for Economic Co-operation and Development (OECD) is the leading global standard-setter in tax matters. Its work on the BEPS Project, the Inclusive Framework on BEPS, and the Two-Pillar Solution to Address the Tax Challenges of the Digitalising Economy has had a transformative impact on tax systems worldwide. The OECD also develops best practices and guidance on tax administration through initiatives like VITARA.

• The EU’s Role and Legal Landscape: The EU has no direct legislative power in taxation, but it exerts significant influence through directives (e.g., the Anti-Tax Avoidance Directive – ATAD) which member states are obligated to implement. Taxation is a national measure, even on transactions within the EU’s internal market. This means that although rules are harmonized, they are applied separately in each member state, which can impact the functioning of the internal market.

• Impact on Taxpayer Rights: The application of EU law through directives automatically impacts taxpayers’ rights and obligations. This creates another constitutional level of protection for taxpayers above the national level. The question of proportionality is crucial for understanding the legitimacy of EU tax directives and their impact on economic freedoms.

• The Global Forum on Transparency and Exchange of Information: A key institution established under the OECD umbrella that drives the global standard for transparency and exchange of information for tax purposes.