Global

Details

  • Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 10/8/2013

EU - Report on 2013 tax reform in EU countries  

October 8: The European Commission today released a report, Tax Reforms in EU Member States, which includes analysis of recent tax reforms and identifies tax policy challenges.

The 124-page report Taxation Paper (No. 38) [PDF 8.34 MB]:


  • Provides a detailed overview of recent tax reforms in the EU Member States in 2012 and the first half of 2013
  • Summarizes changes in overall tax revenue
  • Identifies common trends across countries, offering a descriptive typology of reforms

Overview

The report analyses tax policy challenges of EU Member States with regard to macroeconomic performance and GDP, employment, and fiscal sustainability specifically. As noted in a related EC release [PDF 109 KB]:


  • Approximately one third of the EU Member States was found to have scope for shifting taxation away from labor to tax bases less detrimental to growth. In these cases, a high tax burden on labor (including specific labor market groups) coexists with some room for increasing growth-friendly taxes, i.e., consumption taxes, recurrent housing taxes and environmental taxes.


  • Indicator-based results show that a limited number of EU Member States could consider using taxation—in addition to expenditure control—to support the consolidation of their public finances and make them more sustainable. These countries face sizeable consolidation challenges and, at the same time, have some room for tax increases.


  • Specific challenges faced by EU Member States are investigated in the areas of tax expenditure, the broadness of the VAT base, the “debt bias” in corporate taxation (i.e., deduction is allowed for interest paid, but not for equity costs), housing taxation, environmental taxation, and tax governance.



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