Taxation

The European Union has no competence over taxation (Photo: European Central Bank)
Tax policy is a symbol and an important element of national sovereignty, and forms part of a country’s overall economic policy. The EU has no power (competence) over direct taxation, only over indirect taxation - and then only if approved unanimously.

Discriminatory taxation is forbidden and this rule is used by the EU Court to put pressure on Member States, for example, in judgements by the EU Court or in court verdicts about the taxation of pensions. Making taxation consistent across the EU (harmonisation) requires unanimity among the EU states.

The future

The EU Constitution also provides for the possibility to introduce qualified majority on measures on indirect taxes within the area of administrative cooperation and tax fraud (Art. III-60). The Council decides by unanimity if an area falls under the above mentioned rule.

Links

http://europa.eu.int/comm/taxa......taxation/company_tax/index.htm