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The study analyses the gap between the amount of VAT due and the amount received in 25 Member States. See also the press release ( IP/09/1655 )

The study carried out by Ernst & Young provides a comprehensive overview of the implementation of the Tax Merger Directive (Council Directive 90/434/EEC as amended) in the 27 EU Member States. The purpose of the survey is to enable the Commission to assess the need for further EU-wide action in this area. The main finding of the survey is that most Member States have correctly transposed the Tax Merger Directive, but it has been under-utilised due to the fact that the corporate law allowing cross border mergers has not been in place in many countries up to recently. The findings and conclusions of the study are those of the authors and should not be construed as reflecting the position of the European Commission.

Executive summary and analysis

Country specific annexes

A study on the VAT invoicing rules contained in the VAT Directive ( 2006/112/EC) was carried out for the European Commission by PricewaterhouseCoopers. It aims to look at the four principal areas of invoicing - the requirement to issue an invoice, the content of an invoice, electronic invoicing and the storage of invoices - with a view to mapping the existing legislation in all Member States, analysing burdens on business and Member States' control needs, and providing recommendations for a more harmonised and modern set of VAT invoicing rules.

The study examines the potential use of reduced VAT on environmentally friendly goods and the current application of reduced VAT on energy consumption by households. The analysis is carried out in the context of EU policy approach to climate change and energy security, including interaction with other policy instruments at the EU and national levels. The core of this study focuses on what role - if any - should VAT rate policy play in underpinning these objectives.

The study examines four products with high energy-saving potential: refrigerators, washing machines, boilers and compact fluorescent lamps. The cost-benefit analysis is done in a comparative perspective so that the costs and benefits of energy taxation and a regulatory measure are calculated for the same products. The data from four different Member States (Denmark, France, Italy and Poland) are used in the analysis.

Summary report (60Ko)

Study (4.5Mo)

Using an applied general equilibrium model for Europe, the study explores the economic implications of an allowance for corporate equity (ACE), a comprehensive business income tax (CBIT) and a combination of these two systems. The key trade-offs in designing ACE and CBIT in the presence of tax distortions are illustrated at various decision margins of firms (financial structure, investment, profit allocation and location).

Note on the study

Technical Annex

The project 'Effective tax rates in an enlarged European Union' is based on the methodology used for the calculation of ETRs as set out by Devereux and Griffith (1999, 2003). It extends the scope of the calculation of ETRs conducted under the Company Tax Study (2001) by adding the 12 new EU member States. The study includes a focus on the effects of tax reforms in the EU27 for the period 1998-2007 and their impact on the level of taxation for both domestic and cross-border investment, as well as a partial analysis of SME partnerhips.

The study looks at the potential impacts of changing current VAT rates to align them with environmental goals in some specific cases - domestic energy supply, food and dairy products, insulation materials, white goods and boilers. It finds that the suitability of differential VAT as a policy instrument differs greatly across products, in particular depending on the nature of the market failure in consumer behaviour which the VAT rate would be trying to correct.

In its Communication on the need to develop a coordinated strategy to fight against fiscal fraud ( COM/2006/254) the Commission suggested a series of measures to improve the exchange of information. One of these measures is the reduction of timeframes for the collection and exchange of information on intra -Community transactions. This measure was pointed out by the Council in its conclusions of 5 June 2007 as a priority measure to implement. This study analyses the possible impact of this measure on businesses active in intra-Community trade.

In its Communication on tax fraud ( COM/2006/254) the Commission suggested a series of measures to improve the exchange of information. One of these measures was the collection and exchange of more detailed information on intra-Community transactions. In the discussions in the anti tax fraud strategy expert group, some Member States indicated that they were in favour of a more detailed information on intra-Community transactions. This measure was listed by the Council in its conclusions of 5 June 2007 as one of the measures for further discussion. This study analyses the possible impacts of this measure on businesses active in intra-Community trade.

One of the debated solutions to combat certain types of VAT fraud is the introduction of a general reverse charge mechanism in the VAT system. The European Commission therefore decided to explore the impact of the introduction in certain Member States of such a system.

A reduced VAT rate can be applied to certain specified labour-intensive services, but only for an experimental period so as to test its impact, in terms of job creation and in combating the 'black' economy.

The study examines the theoretical and empirical merits of four different arguments for reduced VAT rates. Two based on efficiency grounds: Can reduced VAT increase efficiency by increasing productivity or by reducing structural unemployment? Another two based on equity grounds: Can reduced VAT enhance equity by improving the income distribution or by making particular products more accessible to the entire population?

The study examines the impact of reduced VAT rates and of derogations, not only for locally supplied services, but also more globally. The effects on income distribution, the informal economy and compliance costs for businesses were also taken into consideration. Read more.

Study

Appendices

The aim of the project 'Tax/benefit systems and potential growth of the EU' − TAXBEN is an in-depth analysis of tax/benefit policies in five broad themes, where these policies play a crucial role in terms of the key EU goals: employment; corporate taxes under tax competition; productivity growth and convergence; macroeconomic policies under a single monetary policy; and environment and climate change. The project was carried out by seven European economic policy research institutes within the European Network of Economic Policy Research Institutes (ENEPRI).

The study carried out by PricewaterhouseCoopers aims to increase the understanding of the economic effects of the VAT exemption for financial and insurance services. The views expressed in the report are solely those of the authors and do not necessarily reflect the views of the European Commission, nor bind the Commission. The analysis and conclusions presented are the sole responsibility of the authors.

Management summary

Main report

Annexes

The survey carried out by the International Bureau of Fiscal Documentation (IBFD) aims to provide a comprehensive overview of the implementation of the Interest and Royalty Directive and application of Article 15(2) of the Agreement between the EU and the Swiss Confederation in the Member States covered.

Executive summary and analysis

Country specific annexes

The objective of this study is twofold: first to analyze how the implementation of the EU energy tax policies will affect the EU and its Member States and secondly to analyze how energy tax policies can contribute to climate policy objectives in the enlarged EU.

Annex in PDF
Annex in Excel

Study on analysis of potential competition and discrimination issues relating to a pilot project for an EU tax consolidation scheme for the European Company statute (Societas Europaea)

This survey provides an overview of taxation of the European Company (SE) in 15 EU Member States (April 2003, in English only)

• Summary Report
• Country Reports

Survey on the taxation of the European Company (SE) in the EU Member States

• Summary Report
• Country Reports:
  • Austria
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Grece
  • Ireland
  • Italy
  • Luxembourg
  • Netherlands
  • Spain
  • Portugal
  • Sweden
  • United Kingdom

Study on economic and environmental impacts of energy taxation :

• Final report
• Summary and Conclusions

Model based calculations constitute the core output of this study. The calculations assess the extent to which vehicle related taxes (mainly acquisition taxes and ownership taxes) can be effective means to reduce CO2 emissions from new cars.

This report was made for the Commission's Taxation and Customs Union DG.

Commission Staff Working Paper - SEC(2001) 1681.

See also the Annex .

Study on the competition between alcoholic drinks (February 2001)

Report on the Structure of the Taxation Systems in Estonia, Poland, Hungary, the Czech Republic and Slovenia.

Passenger transport is taxed on the basis of distance covered in each Member State and tax is collected at internal frontiers. Many different tax rates apply to passenger transport across the EU with some Member States applying exemptions and zero-rates. Even within the same Member State competing modes of passenger transport may be taxed differently. The study explores the economic, fiscal and practical effects of a number of alternative taxation structures for passenger transport services performed within the EU.

Report giving a detailed description of a modified form of the cash flow system of VAT (The TCA-ADD Report).

• Introduction
• Executive Summary

A study of Methods of Taxing Financial and Insurance Services, carried out for the European Commission by Ernst & Young, 1996 (The 'blue book').

Note:The Commission has from time to time sought consultants' reports on VAT on financial services and insurances. We frequently receive requests for access. To facilitate this, they are published on the website to the extent that the contents permit.

For the TCA-ADD Report, publication is restricted to the introduction and an extensive executive summary. The more detailed annexes of this report focus on field testing of the TCA model. This was undertaken with the assistance of several financial institutions and insurance companies who participated on an expressed commitment of confidentiality. As the annexes contain extensive data which was supplied on this understanding, these parts of the report are not being made publicly available.

This study performed for the European Commission deals with the application of Value Added Tax to the property sector in 15 Member States of the European Union.