TThe thesis deals with the theoretical and practical issues related to the regulation of corporate tax relations in the European Union. Though the EC Treaty does not oblige corporate taxes to be harmonized, but Article 94 of the EC Treaty provides for approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the internal market. In any case, national tax rules must respect the fundamental freedoms provided for the EC Treaty. The researches of Neumark Report of 1962 and Tempel Report of 1970 together with a number of initiatives designed to achieve a limited degree of harmonization of the corporate tax system. The Commission presented range of related proposals. EU Member States came to the common conclusion that economic integration would require greater cooperation in the field of tax collection. Such aspiration was supported by the necessity to eliminate double taxation, ensure effective taxation and prevent tax evasion. In this regards the Commission approved three measures - two directives and a convention - were finally adopted in July 1990 the Merger Directive 90/434/EEC, the Parent-Subsidiary Directive 90/435/EEC and the Arbitration Convention 90/436/EEC. The Directives are supplemented by the case law of the European Court of Justice, which render numerous decisions in the area of corporate taxation. The case law of ECJ is applied to achieve uniform regulation of certain tax matters in accordance with EU law. Along with EU Directives and ECJ case law corporate tax relations are regulated by numerous sources of soft law, like Commission Communications, Model Conventions, Codes of taxation, etc. The last section of the thesis is devoted to the Tax Reform in Ukraine based upon European standards in the field of corporate taxation of profits. Harmonization of the Ukrainian tax legislation to the European one is rather a necessity than a duty. In addition, the investment attractiveness of the Ukrainian market system depends on the income tax. The best way of legislation amending is borrowing legal tax schemes used in other European countries, especially those that have recently joined the European Union. In Ukraine, the corporate tax is important not only from fiscal point of view, but also as an important tool to regulate and stimulate entrepreneurial activity and the key to improve investment climate. Recently launched tax reform, aiming to raise the effectiveness of the tax system has also made changes to the taxation of corporate income. It seems important to introduce some more amendments in the existing legislation. One of such amendments concerns the introduction of consolidated taxation mechanism for the purposes of administration of income tax. The model of the group losses seems to be the most acceptable for Ukraine. The introduction of such a system will help to form a transparent pricing policy for products produced by granting tax preferences in the administration of income tax. Bringing Ukrainian legislation on income taxation in line with European norms and standards is particularly important in cases of cross-border activity as Ukrainian companies in the EU member states, and vice versa. In this relation the main problem of such activity - double taxation - is resolved solved by applying international tax conventions which provide standard operating techniques eliminating double taxation. Such conventions are mandatory, but they form the basis of a relevant national laws and bilateral agreements on avoidance of double taxation. Taxation in cross-border activities and companies is also regulated by the instrument of transfer pricing. Using this tool, a company (group of companies) is able to allocate income and expenses between its departments, providing broadening of the tax base in areas with lower tax rate and vice versa. Although new national transfer pricing legislation complies with the relevant European norms and standards, it has several disadvantages. The main problematic issues related to reporting on controlled operations, namely the level of detail of description controlled operations, inability noted price transactions form other than money, the problem of specifying units of measurement and rounding monetary indicators, no list of official sources to calculate normal prices for controlled operations to provide services. The tax reform has begun, but still needs numerous amendments in order to approximate Ukrainian corporate tax system to European one.
