Taxation

The rules in Chapter 3.16 Taxation in the EU include value added tax, excise duties and certain aspects of corporate taxation. They also regulate cooperation between tax administrations, including the exchange of information to prevent tax evasion. EU policy is focused on two components: a. direct taxation, which is for the most part within the jurisdiction of the country members and b. indirect taxation, which has an influence on the free movement of goods and the freedom to provide services, and is therefore subject to harmonization at the EU level (but decisions on the relationship to taxes are always taken unanimously). In relation to direct taxation, Member States take measures to prevent tax evasion and double taxation. The purpose of the tax policy is to ensure that competition between member countries of the single market is not impaired due to differences in tax rates and indirect tax systems (VAT and excise). Measures have also been adopted to prevent the negative effects of tax competition, if companies transfer money from one member country to another.