Taxation

What the EU does

The European Union helps coordinate national tax rules and rates, particularly for cross-border issues. Its taxation policies aim to address challenges such as fair taxation, simplifying the tax environment for businesses, and supporting the transition to a greener and digitalised economy.

The main objectives are to make taxation fairer, more transparent, and efficient by eliminating tax discrimination, double taxation, and tax evasion, as well as simplifying compliance rules. Ultimately, the EU seeks a fair, efficient, and effective taxation to create a favorable business environment, promote competitiveness, and support economic growth.

Key figures

40%

Average percentage of GDP accounting for total tax revenue

33%

Share of indirect taxes in the total tax revenue

€6,711 billion

Tax collected by Member States in 2023

Source: Data on Taxation Trends - European Commission

Areas of action

Value Added Tax (VAT)

Find out how EU VAT works as a resource for EU budget

Business Taxation

Policies preventing double taxation and tax avoidance

Excise Taxes

Indirect taxes on the sale or use of alcohol, tobacco, energy products and electricity

Tax Transparency and Cooperation

Cooperation between businesses, tax authorities and civil society organisations

Economic Analysis

Input for policy making on various taxation aspects

Carbon Border Adjustment Mechanism (CBAM)

Price on the carbon emissions of goods entering the EU, supporting decarbonisation

Key achievements

The EU has updated and simplified the EU's Value Added Tax (VAT) system for the digital age. It aims to make rules easier for businesses, reduce fraud and improve how VAT is collected. Main changes include single VAT registration, digital reporting, and stronger cooperation between tax authorities.
The Carbon Border Adjustment Mechanism is a major step to protect climate while supporting fair competition. By putting a carbon price on certain imported goods, such as cement, steel, and aluminum, the EU has created a level playing field for its businesses and encouraged cleaner production worldwide.
By enabling secure and automatic exchange of information between national tax authorities, the EU has taken a major step in combatting tax evasion and avoidance. This cooperation allows countries to better identify and address tax evasion, and to recover unpaid taxes. It is a key achievement in building a fair and efficient taxation across the EU.
By stepping up the fight against VAT fraud, the EU has taken major action to protect public revenues and ensure fair taxation. VAT fraud is a significant issue, with around €61 billion in VAT losses in 2021. The EU has strengthened cooperation between Member States, improved information exchange through tools such as the Eurofisc network, and introduced reforms in e-commerce and digital reporting. These efforts, including new rules for payment service providers, and a proposed a real-time e-invoicing system, are a major step toward a fraud-resistant VAT system.