Taxation of employees across borders within the EU - A quantitative approach to comparative and historical analyses

• Applicant: Professor Dr. Ekkehart Reimer
• Subject Area: Public Law
• Term: from 2011 to 2017
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 197156964

Whereas the initial project analyzed the taxation of labor income from a mere national perspective, its intended continuation, however, will expand upon this focus to include cross-border workers within the European Common Market. This demands a slight modification of the jurisdictions comprised in the analysis. The subsequent project will focus on jurisdictions that demonstrate a significant number of commuters to neighboring countries. Besides Germany, the analysis will include Austria, Belgium, Denmark, France, Great Britain, Ireland, Italy, Luxembourg, the Netherlands, Poland and - being associated with the EU - Switzerland. The modified focus of the comparison also results in an extension of the relevant sources of law. Both the fundamental freedoms (whose effect on tax law was greatly influenced by the jurisdiction of the ECJ in Schumacker/Gilly/Gschwind/Schempp etc.) and the regulations are important factors for evaluating the taxation of labor income from an international perspective.This triad of legal sources will be analyzed regarding their respective content and impact as well as their interaction among each other.The initial focus will address the various systems of taxing workers` cross-border income. These results will be tested against the principle of taxation on a net basis. This information provides a comparison of cross-border and exclusively national income taxation. A further comparison involves the correlation of this relationship with the different combinations of jurisdictions. This data makes it possible to numerically indicate the extent to which the fundamental freedoms are implemented by the member states. In addition, such a comparison identifies the level of net taxation which is achieved by the national jurisdictions as regards cross-border workers. As a second step, the different deductions will be varied. This multivariate analysis will reveal the specific factors influencing the diverging tax burdens. Besides these comparative aspects, the analysis will also encompass a diachronic perspective. Including the governing law of 1990 and 2012 will especially lead to identifying the influences of the jurisdictions of the ECJ.The aspect of double taxation conventions will also be addressed on a quantitative and comparative basis. The main questions will be if and to which extent the content and design of these treaties influence the taxation of the respective taxpayer. Other aspects address the origin, background and development of the different provisions. This will be used as a basis for establishing several groups of conventions. These results will be interpreted by posing the - mere political - questions of the justification and necessity of double taxation conventions.The results will be documented in a publicly accessible database. Using the jurisdictions, the time and the individual configuration of the taxpayer as variable factors, the output of this database will be the individual tax burden.

• DFG Programme: Research Grants