The Evolution of Tax Harmonization in the European Union

Abstract

Tax harmonization helps to implement the four freedoms of the Single Market. Indirect taxation within the European Union (EU) requires a high level of harmonization, due to its influence on the free movement of goods and services. This idea was underlined in Article 99 of the Treaty of Rome in 1957 and repeated in Articles 90 and 93 of the Treaty of Maastricht in 1992. The main efforts of indirect tax harmonization (harmonization does not mean the uniformization of taxes) were focused on value added tax (VAT) and excise duties. According to the EU treaties, there are no express provisions requiring the harmonization of direct taxes, as there are in the case of indirect taxes. Common European legislation does not expressly specify the alignment of direct taxes, and by virtue of the subsidiarity principle member states are free to adopt those regulations regarded as necessary for their own economies.KeywordsEuropean UnionMember StateDouble TaxationExcise DutyArbitration ConventionThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.