International tax law needs to be simplified

The taxation of multinational companies has become significantly more complex in recent years. New regulatory frameworks such as the EU Anti-Tax Avoidance Directive (ATAD), measures targeting tax havens, and, since 2024, the global minimum tax are intended to curb aggressive tax planning. In practice, however, they have created an increasingly dense web of regulations.

In a recent guest article for the Frankfurter Allgemeine Zeitung (FAZ), Christoph Spengel, together with doctoral researcher Sophia Wickel, explains why the current system urgently needs to be reassessed. Their analysis is based on a joint study by the University of Mannheim, ZEW – Leibniz Centre for European Economic Research, and EY examining the implementation of these rules across all 27 EU member states.

The findings show that despite common minimum standards, national regulations differ considerably. For internationally active companies, this results in high levels of complexity, overlapping rules, and rising compliance costs.

The article is particularly critical of the global minimum tax. It creates substantial administrative burdens, while generating comparatively limited additional tax revenues.

The conclusion is clear: Europe needs a simpler, more coherent, and internationally competitive tax system. Only then can fairness, efficiency, and economic competitiveness be effectively aligned.

You can read the entire guest article by Prof. Spengel (Chair of Business Administration and International Taxation (Taxation II)) and Sophia Wickel (PhD student at the University of Mannheim and research associate at ZEW) here (behind a paywall).