Annual Report on Taxation

Annual Report on Taxation 2026

The 2026 Annual Report on Taxation (ART) takes stock of taxation and tax-related trends in the European Union (EU) Member States. In a context of further macroeconomic shocks and uncertainty, the interplay between tax design, tax incentives and policy goals is explored, featuring the cases of work incentives and the tax instruments rolled out under the Clean Industrial Deal. The report comprehensively reviews recent developments in the tax mix, notably shifts across tax types and tax bases and medium-term prospects. Recent tax policy initiatives at both EU and national levels are summarised. The final chapter is a deep-dive into social and economic determinants of tax compliance from the perspective of the taxpayer.

The report is structured as follows:

• Chapter 1: starts with an overview of the EU economy at its current juncture, setting out the current macroeconomic situation and the outlook for the next two years. Additionally, it discusses the role of taxation as a policy instrument that can provide incentives for individuals and firms to adjust their behaviour in support of specific policy objectives.
• Chapter 2: provides top-down analysis on the structure of tax revenues at EU and country level, starting by overall revenues, followed by the breakdown by economic function and the most important tax types (SC, PIT, CIT, VAT, environmental and property taxes), and finalising with a discussion on recent shiſts in the tax mix and medium-term prospects.
• Chapter 3: starts with an analysis of the tax reform measures reported by the Member States in thelast Joint OECD-European Commission Annual Tax Policy Reform Questionnaire. It follows an overview of the most recent EU tax policy initiatives and concludes with an overview of country initiatives implemented under the support of the TSI and the RRF.
• Chapter 4: considers tax compliance from the perspective of the taxpayer. The determinants of tax compliance as identified in the literature are complemented with empirical evidence on citizen’s attitude, mostly relying on the recent Flash Eurobarometer 562 on Citizens’ Attitudes towards Taxation.

Previous editions