European Commission: Report on Tax Reforms in EU Member States 2015

European Commission publishes report on tax reforms in EU Member States „Tax Reforms in EU Member States 2015 – Tax policy challenges for economic growth and fiscal sustainability”. According to the report, EU Member States have made progress towards improving their tax systems but most still face important challenges and should continue their efforts.

The Tax reforms report 2015, published by the Commission’s Directorate General for Economic and Financial Affairs (ECFIN) and the Directorate General for Taxation and Customs (TAXUD), presents an overview of recent tax reforms in the Member States and gives an indication of their performance in major areas of tax policy. Tax reforms can help to improve public finances, support growth and job creation, strengthen economic stability and increase fairness.

The report Tax Reforms in EU Member States serves four main purposes.
Firstly, it reviews the most important tax reforms recently implemented in EU Member States.
Secondly, it discusses a number of challenges relating to tax policy that may affect macroeconomic performance, in terms of growth, employment, public finances and macroeconomic stability.
Thirdly, the report provides a basis for dialogue, on the role of tax policies in promoting sustainable growth, employment and social equity. In this context, it also encourages a valuable exchange of best practice in the area of tax reforms.
Lastly, the report contributes to an informed dialogue with civil society on what is generally considered a sensitive topic. This is particularly relevant and important in the current economic
context.

One of the most important challenges for many Member States is to reduce the tax burden on labour. Acknowledging this challenge, euro area Finance Ministers recently committed to benchmarking the performance of their countries in this area to the EU average.

Further challenges identified by the report include the design of housing taxation systems, the preferential treatment of debt in corporate income taxation, tax compliance particularly in VAT, the efficiency of tax administrations, and improving fairness.

This report presents an overview of recent tax policy reforms across the EU and provides up-to-date analysis of challenges being faced in these areas. It also includes indicator-based assessments, which provide an insight into the relative performance of Member States’ tax systems in terms of efficiency, effectiveness and equity to inform the national and European policy debate. Further, in-depth country-specific analysis would need to be carried out before any definite conclusions could be drawn as to the appropriate policies to be introduced in any particular country.

In June, the Commission presented an Action Plan for fair and efficient corporate taxation, something Commission President Jean-Claude Juncker referred to in his recent State of the European Union speech. An infographic provides a quick overview of the report’s main findings and trends.

Further information can be found in the MEMO, and the full report here.