The European Commission regularly publishes reports and studies to better inform our work on taxation. These documents may be written by the EU and its bodies and/or by independent consultants.
All documents below are shown in reverse chronological order of publication.
The project 'Effective Tax Levels in the European Union' extends the scope of the 2008 study on effective levels of company taxation within an enlarged EU. It is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).
The study focuses on the effects of tax reforms in the EU27 for 1998-2021, and for North Macedonia, Turkey, Norway, Switzerland, Canada, Japan and the United States for 2005-2021, including their impact on the level of taxation for both domestic and cross-border investment.
Effective Tax Levels in the EU (2021 Report) – March 2022
An analysis of the four main areas of change in the future of taxation: technology, demographics, globalisation and environmental externalities; and how different trends and drivers of change in these areas can be expected to impact the main functions of taxation and tax administration.
Study on Future Trends and Taxation (Final Report) – June 2021
The project 'Effective Tax Levels in the European Union' extends the scope of the 2008 study on effective levels of company taxation within an enlarged EU. It is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).
The study focuses on the effects of tax reforms in the EU28 (1998-2020), and for North Macedonia, Turkey, Norway, Switzerland, Canada, Japan and the United States (2005-2020), including their impact on the level of taxation for both domestic and cross-border investment.
Effective Tax Levels in the EU (2020 Report) – February 2021
This study assesses Articles 32 and 36 of Council Directive 2008/118/EC concerning the general arrangements for excise duty.
It focuses on the cross-border acquisition of excise products by private individuals, the cross-border distance selling of excise products by businesses to consumers, and the wholesale to retail sales of excise goods by a business in one Member State to a business in another.
Data was collected from consumers, businesses and national authorities from across the EU, and combined with other analyses to estimate the size and magnitude of issues relating to current arrangements. Potential policy responses are identified and assessed using a cost-benefit analysis.
- Executive Summary (EN/FR/DE)
The project 'Effective Tax Levels in the European Union' extends the scope of the 2008 study on effective levels of company taxation within an enlarged EU. It is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).
The study focuses on the effects of tax reforms in the EU28 (1998-2019), and for North Macedonia, Turkey, Norway, Switzerland, Canada, Japan and the United States (2005-2019), including their impact on the level of taxation for both domestic and cross-border investment.
Effective Tax Levels in the EU (2019 Report) – January 2020
The first part of this study focuses on the conformity of national legislations with the directive for cross-border intra-EU refunds (EC-2008/9) and with the CJEU case law related to domestic refunds. Note that even if there is no harmonised legislation for domestic refunds, the CJEU has identified limits to the freedom of Member States that have to be respected in any case.
The second part analyses the level of implementation of the law and tries to identify and quantify the consequences of such implementation, highlighting problems and/or obstacles that taxable persons and VAT refund agents face while claiming VAT refund both in the Member State of establishment and in another Member State. The study also considers the perspective and difficulties of national tax administrations in administering and controlling such claims.
VAT Refunds and Reimbursements: A Quantitative and Qualitative Study (Final Report) – May 2019
The authors of this report presented a restructured version after the official version was published. The update presents the analysis in separate documents to recognise the differences in the legal and administrative frameworks governing VAT refunds and reimbursements.
The authors accept full responsibility for these changes. Note that the official version of the final report accepted by the Commission is the version previously published.
VAT Refunds and Reimbursements: A Quantitative and Qualitative Study (Final Report) – June 2019
The project 'Effective Tax Levels in the European Union' extends the scope of the 2008 study on effective levels of company taxation within an enlarged EU. It is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).
The study focuses on the effects of tax reforms in the EU28 (1998-2018), and for North Macedonia, Turkey, Norway, Switzerland, Canada, Japan and the United States (2005-2018), including their impact on the level of taxation for both domestic and cross-border investment.
Effective Tax Levels in the EU (2018 Report) – March 2019
The study provides an overview of the invoicing rules included in Directive 2006/112/EC and how they are implemented by Member States.
The study has four main objectives:
- measuring the decrease in the administrative burdens for businesses;
- assessing the degree to which the new rules on e-invoicing have contributed to the uptake of this technology;
- assessing the role played by the new invoicing rules to support EU Member States’ efforts to tackle VAT fraud and improve tax compliance;
- formulate evidence-based possible ways forward.
Study on the Evaluation of Invoicing Rules of Directive 2006/112/EC – January 2019
The Report explains the mechanism of VAT fraud; describes the VAT fraud types, insisting on the Missing Trader Intra Community (MTIC) fraud; reviews the MTIC fraud literature; describes VAT fraud estimation methodologies; lists the possible data sources for the estimation of VAT fraud and; and reflects on the possibility of a European approach.
The Concept of Tax Gaps Report III: MTIC Fraud Gap Estimation Methodologies – December 2018
The project 'Effective Tax Levels in the European Union' extends the scope of the 2008 study on effective levels of company taxation within an enlarged EU. It is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).
The study focuses on the effects of tax reforms in the EU28 (1998-2017), and for North Macedonia, Turkey, Norway, Switzerland, Canada, Japan and the United States (2005-2017), including their impact on the level of taxation for both domestic and cross-border investment.
Effective Tax Levels in the EU (2017 Report) – Corrected August 2018, originally published January 2018
The Corporate Income Tax (CIT) Gap is the gap between corporate tax revenues as they ‘should be’ collected and as they ‘are’ collected. The gap is therefore an indication of potential CIT revenue losses. This report maps different methodologies and approaches for estimating CIT gaps.
The report provides an overview of CIT gap estimation methodologies used by Member States or other jurisdictions, and reviews selected methodologies developed by researchers and international organisations.
It discusses the strengths and weaknesses of the methodologies, provides useful elements for tax administrations or any other interested party to identify which methodology they could consider to estimate the CIT gap depending on their needs, data availability, resources and timeframe. This is the second report following the first on VAT Gap Estimation methodologies.
The Concept of Tax Gaps Report II: Corporate Income Tax Gap Estimation Methodologies – July 2018
This study contributes to the Impact Assessment of a possible revision of Council Directive 92/83/EEC on the harmonisation of the structures of excise duties on alcohol and alcoholic beverages.
The study includes a baseline assessment of issues which emerged from a previous evaluation of the Directive and an analysis of how these problems may evolve if no EU action is taken. It also presents a set of possible policy options to address the issues and assess their likely impacts.
Study on Council Directive 92/83/EEC on the Structures of Excise Duty on Alcohol and Alcoholic Beverages – June 2018
Based on Article 199a (3) of the VAT Directive, the Commission shall present an overall assessment report on the effects of the mechanism provided for in Article 199a (1) of the VAT Directive on combatting fraud. Following Article 2 of Directive 2013/42/EU amending the VAT Directive, the Commission shall present an overall assessment report on the impact of the QRM measure.
As required by the VAT Directive, the report focuses on the effects of the measures provided for in Article 199a of the VAT Directive on combatting fraud and on the impacts of the mechanism provided for in Article 199b of the VAT Directive.
The report aims to initiate and facilitate co-operation between businesses and tax administrations. On the one hand, businesses and consumers must be enabled to benefit from the opportunities presented by this responsive and globalised economy. On the other hand, tax administrations must ensure the effective collection of VAT and the detection of fraud and evasion.
The report specifically addresses the issues related to access to information in the e-commerce supply chain and the exchange of this information. The report focusses on the understanding of the businesses’ key functions and commercial background in order to identify the background of the transactions, who holds the information and what the risks are.
Consolidated Report on Cooperation between Member States and Businesses in the Field of e-Commerce – March 2018
The study shows the potential benefits and significant challenges related to split payment as an alternative VAT collection method. Although split payment has high potential to reduce the VAT gap, if applied broadly across the EU, the cost of it through increased complexity of the VAT system, high administrative burden and significant impact on business’ cash flow may easily outweigh the benefits.
Therefore, the study concluded that broad application of split payment is likely to be an unattractive policy tool, given the significant rise in costs for business and authorities. However, it has characteristics that are very effective in reducing certain types of fraud and therefore may be suited as a targeted measure with limited scope.
Analysis of the Impact of the Split Payment Mechanism as an Alternative VAT Collection Method – December 2017
The study analyses the functioning of the special scheme for travel agents set out in Articles 306 to 310 of the VAT Directive, which was put in place in 1977 as a simplification measure to avoid multiple registration obligations for businesses and to allocate VAT revenues to the Member State of consumption.
The study reviews the relevant judgments by the Court of Justice of the European Union. It evaluates the impacts of established case law itself and those of national VAT laws deviating from the common EU rules. Finally, the study considers how the original objectives of the scheme can best be achieved and if there is still a need for a special scheme.
Study on the Review of the VAT Special Scheme for Travel Agents and Options for Reform - December 2017
Tax incentives have become an increasingly important part of the investment and innovation policy mix in the EU and beyond. This study promotes the diffusion of good practices across Member States by investigating the role that tax incentives for venture capital and business angels can play in fostering investment.
The study is an action of the Capital Markets Union project that aims to strengthen the single market by deepening the integration of investment across the European Union. Improved access to finance is a key component of this project, particularly for start-ups, SMEs and young companies with innovative growth plans.
The study investigates the impact of reforms that would allow Member States greater autonomy in running their domestic VAT systems, notably as regards rate-setting powers and the capacity to define which subsets of goods and services fall under which rate bands. These reforms also aim at abolishing the existing country-specific derogations and replacing them with rules applicable to all Member States.
The study assesses the impacts of such an enhanced flexibility on the proper functioning of the internal market in a multi-jurisdictional context, including the distortions that may arise, the risk of harmful tax competition, and the ramifications for the simplicity and efficiency of the VAT system as a whole (both in individual jurisdictions and intra-EU).
Reform of Rules on EU VAT Rates (TAXUD/2015/DE/333FWC No.TAXUD/2015/CC/131) - May 2017
Under the VAT Directive, Member States can adopt specific schemes and measures to reduce administrative burdens on SMEs. These are regarded as territorial and unsuitable for trade in a cross-border environment. Given, in addition, recent developments towards taxation at destination and the Directive for modernising VAT for e-Commerce, an in-depth review of the special scheme for small enterprises (implemented in the Member States as “SME schemes”) and measures is timely.
This study analyses the functioning of the SME schemes and measures for SMEs against the backdrop of the SME environment. Based on findings from literature and contacts with tax authorities, businesses and experts, four policy options are formulated and assessed in accordance with European Commission Better Regulation Guidelines. Impacts of these options on businesses, Member States of the EU and the wider economy are reported.
Special Scheme for Small Enterprises under the VAT Directive 2006/112/EC - Options for Review – May 2017
The market for electronic cigarettes and corresponding e-liquids has experienced enormous growth in recent years. Some EU Member States reacted to this development and introduced excise duties on e-liquids.
The partial introduction of excise duties in the common market and the lack of harmonisation in their magnitude might cause distortions of the market. For that reason, DG TAXUD commissioned a study on the identification and characterisation of e-liquids.
This study contributes to the impact assessment of a possible revision of Council Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco.
It includes a baseline assessment of issues that emerged from a previous evaluation of the Directive and analyses how these problems may evolve if no EU action is taken. It also formulates a set of possible policy options to address these problems and assesses their likely impacts.
The project 'Effective Tax Levels in the European Union' extends the scope of the 2008 study on effective levels of company taxation within an enlarged EU. It is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).
The study focuses on the effects of tax reforms in the EU28 (1998-2016), and for North Macedonia, Turkey, Norway, Switzerland, Canada, Japan and the United States (2005-2016), including their impact on the level of taxation for both domestic and cross-border investment.
Effective Tax Levels in the EU (2016 Report) – January 2017
This study provides an overview of how valuation techniques can be used practically and efficiently for transfer pricing purposes in the EU, particularly for transactions involving intangibles.
It investigates the differences between valuations for transfer pricing and for other purposes and explores the state of play in terms of experience of EU Member States and trade partners. Data was gathered through desk research and interviews with transfer pricing and corporate finance valuation specialists from all EU Member States and nine of the EU’s main trade partners.
This study provides an overview and assessment of the availability and quality of market data (comparables) used for transfer pricing purposes and, more specifically, comparable searches under the Comparable Uncontrolled Price (CUP) and Transactional Net Margin (TNMM) methods in the EU-28 Member States.
The study covers the following aspects: assessing and evaluating situations characterising the lack and/or non-reliability of comparable data; assessing and evaluating the situation for pan-European comparable searches; developing and envisaging EU-tailored solutions and possible adjustments, taking into consideration some advantages and assets offered by the EU internal market; contribute to strengthening and effectively implementing an improved EU transfer pricing framework and fight against aggressive tax planning.
Study on Comparable Data Used for Transfer Pricing in the EU – December 2016
This study supports the December 2016 proposal by the Commission to modernise VAT for cross-border e-commerce. The report (December 2016) is presented in three lots:
- Lot 1 - Economic Analysis of VAT Aspects of E-commerce
- Lot 2 - Analysis of Costs, Benefits, Opportunities and Risks in Respect of the Options for the Modernisation of the VAT Aspects of Cross-border E-commerce
- Lot 3 - Assessment of the Implementation of the 2015 Place of Supply Rules and the Mini-One Stop Shop
This report introduces the methodologies currently applied to estimate tax gaps, with a focus on VAT gap estimations.
Tax gap estimations are rough indicators of revenue loss. Over the last decade, several methods have been developed by national (tax) administrations and international institutions to estimate these losses. This report presents the most important aspects of tax gap estimations in order to provide a better understanding of estimation methodologies.
The Concept of Tax Gaps – Report on VAT Gap Estimations – March 2016
This study evaluates the current arrangements for the holding and movement of excise goods under excise duty suspension (Chapters I to IV of Council Directive 2008/118/EC).
It presents the findings of the evaluation following the sequence of the arrangements for holding and movement (i.e. authorisations, guarantees, movement and holding of specific products, shortages, excesses, exemptions and export and exit from the customs territory of the Union). The study also looks at the cost effectiveness, the effectiveness to tackle fraud and the EU added value of the Excise Movement and Control System (EMCS), while proposing recommendations to improve this type of trade.
Data was collected through written consultations and online surveys and interviews with selected Member States administrations, economic operators and consumer organisations.
The Study is accompanied by the Executive Summary and an Appendix which provides the details of the feedback received through the comprehensive surveys.
Evaluation of Current Arrangements for the Holding and Moving of Excise Goods under Excise Duty Suspension – February 2016
- Executive Summary (EN/FR/DE)
The project 'Effective Tax Levels in the European Union' extends the scope of the 2008 study on effective levels of company taxation within an enlarged EU. It is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003).
The study focuses on the effects of tax reforms in the EU28 (1998-2015), and for North Macedonia, Turkey, Norway, Switzerland, Canada, Japan and the United States (2005-2015), including their impact on the level of taxation for both domestic and cross-border investment.
Effective Tax Levels in the EU (2015 Report) – October 2015
The study contributes to and completes the draft performance measurement framework developed by the EC to measure the Customs and Fiscalis 2020 programmes’ implementation, processes and results using a comprehensive, detailed and feasible monitoring system. It focuses on the functioning of the programmes and their outputs, results and long-term impact without assessing in-depth the underlying tax/customs policy.
Study on the Fiscalis 2020 and Customs 2020 Performance Measurement Framework – October 2015
This report provides estimates of the VAT Gap for 26 EU Member States for 2013, as well as revised estimates for the period 2009-2012. It is a follow-up to the ‘Study to Quantify and Analyse the VAT Gap in the EU-27 Member States’, published in October 2014.
Study to Quantify and Analyse the VAT Gap in the EU Member States (2015 Report) – August 2015
This study analyses five policy options for tackling two essential issues in the current VAT system: the additional compliance costs borne by businesses that conduct cross-border trade, and the occurrence of VAT fraud. The five policy options are designed to enable the implementation of a destination-based VAT system across the EU.
Study on Implementing the VAT ‘Destination Principle’ to Intra-EU B2B Supplies of Goods – July 2015
The EU VAT Directive provides for a VAT exemption on the importation of small consignments below the EUR 10/22 threshold. This exemption is implemented by all 28 EU Member States.
The study presents an overview of the legal framework and procedures in place in the 28 EU Member States, as well as an economic analysis of the low value consignments market from 1999 until 2013, including an estimation of the potential VAT foregone by tax authorities due to this exemption.
Assessment of the Application and Impact of the VAT Exemption for Importation of Small Consignments – May 2015
This study evaluates the current arrangements for movements of excise goods released for consumption (Chapter V of Council Directive 2008/118/EC) and proposes careful recommendations to improve this type of trade.
It covers intra-EU movements of excisable consignments between traders and distance selling of excise goods to private individuals. Personal purchases by travellers for their own use and transported by the traveller themself are excluded from the scope of the study.
Data was collected through written questionnaires and online surveys and interviews with selected Member States administrations, economic operators and consumer organisations. The study is accompanied by an Executive Summary and Appendix which provide the details of the feedback received through the comprehensive surveys.
Evaluation of Current Arrangements for Movements of Excise Goods Released for Consumption – April 2015
The study assesses the substitutability between physical and electronically supported publications; evaluates the impact of current VAT reduced rates; and explores the impact of extending the reduced rate or the standard rate regime to all kinds of publications.
Economic Study on Publications on all Physical Means of Support and Electronic Publications in the Context of VAT – March 2015
The study assesses the main economic effects of the current VAT rates structure and the economic effects that would follow from abolishing zero and reduced rates under various hypotheses, including the introduction of compensatory measures.
Study on the Economic Effects of the Current VAT Rates Structure – March 2015
Since the last large-scale review in 1997, the passenger transport sector has changed considerably due to the impacts of airline deregulation, rail concessioning implementation and bus transport deregulation. The cruise industry has also changed and experienced high growth. Hence, the importance of the distortions has increased.
The current VAT rules for passenger transport activities can create distortions of competition, notably owing to differences among Members States in the application of VAT exemptions or reduced rates. Even where exemptions or reduced rates do not apply, the complexity of the current place-of-supply rules increase compliance costs and may cause voluntary or involuntary non-compliance.
This study contributes to the debate on possible options for reform by providing a summary of the current state of the passenger transport market, a review of the current VAT regime, an assessment of the impact of many of the distortions and an evaluation of some alternative VAT solutions on which a future improved VAT regime for the transport sector might be based.
Study on the Economic Effects of Current VAT Rules for Passenger Transport – January 2015
A reverse charge mechanism (RCM) has been implemented in Member States' legislation in a number of specific cases as an "anti-fraud tool" in certain sectors that are vulnerable to fraud. In addition to measures that are based on derogations granted by the EU Council in accordance with Article 395 of the Directive 2006/112/EC (hereafter "VAT Directive") or the standstill provision of Article 394 of this Directive, Member States can apply the RCM, under certain conditions, to sectors or types of transactions that are enumerated in Articles 199 and 199a of the VAT Directive.
This study identifies the Member States that make use of the options to apply a RCM and evaluates the economic importance of the RCM, the cash-flow impacts of the RCM and the administrative burden on business of applying the RCM.
Assessment of the Application and Impact of the Optional 'Reverse Charge Mechanism' within the EU VAT System - December 2014
This report provides estimates of the VAT Gap for 26 EU Member States for 2012 and revised estimates for 2009-2011. It is a follow-up to the "Study to Quantify and Analyse the VAT Gap in the EU-27 Member States", published in September 2013.
2012 Update Report to the Study to Quantify and Analyse the VAT Gap in the EU-27 Member States – October 2014
The study aims to understand the recent trends in the field of VAT collection better by updating the VAT Gap estimates for 2000-2006 produced in the Reckon Report of 2009 and by providing estimates for the VAT Gap for the period 2007-2011.
Study to Quantify and Analyse the VAT Gap in the EU-27 Member States – September 2013
A feasibility study carried out by PwC to examine the option of applying the current principle for the place of supply of B2B services to B2B supplies of goods (place of establishment of the customer), without following the physical flow of the goods within the EU.
Study on Applying the Current Principle for the Place of Supply of B2B Services to B2B Supplies of Goods – January 2013
The study analyses and measures the issues arising from the current VAT treatment of public bodies and activities carried out in the public interest. It also identifies possible options for the future and measures their impact.
The views expressed by the contractor do not necessarily reflect those of the European Commission. The Commission accepts no responsibility or liability for the information in this study.
Study on VAT in the Public Sector and Exemptions in the Public Interest – January 2013
The VAT Directive provides that the Commission presents to the Council a report on the VAT treatment of goods and services, including restaurant and catering services, supplied to passengers on board means of transport.
The report focuses on the place of taxation and exemptions applied in this sector. The expert study of 8 February 2012 conducted by PwC for the Commission on this subject is published together with this report.
Report from the Commission to the Council on Supplies on Board of Means of Transport – October 2012
Final report on the application of Article 263(1) of Directive 2006/112/EC (amended by Directive 2008/117/EC), implemented since 1 January 2010.
Article 263(1) aims at ensuring that information on intra-Community supplies of goods, including deemed supplies, and services is collected and exchanged between Member States more quickly, to enable quicker detection of fraud, in particular VAT carousel (missing trader) fraud.
The report was drawn up for the European Commission by PWC in 2011 and focuses on the consequences for business arising from a reduced time frame for submitting recapitulative statements and the possibilities offered to Member States to derogate from the normal rule.
In December 2010, the Commission signed a contract for a retrospective evaluation of the consequences, in economic terms, of the functioning of the most pertinent elements of the current EU VAT system, as identified in the "Green Paper on the future of the VAT". The final report was submitted by the external consultants on 5 December 2011.
This evaluation looked into the design and implementation of certain VAT arrangements, assessing their effectiveness and efficiency in terms of results and impacts they had created. It examined their relevance and their coherence with the smooth functioning of the single market and the requirement to avoid distortion of competition specified in Article 113 of the Treaty on the Functioning of the European Union.
A Retrospective Evaluation of the Elements of the VAT System – December 2011
The study analyses and measures the issues arising from the current VAT treatment of public bodies and activities carried out in the public interest. It also identifies possible options for the future and measures their impact.
VAT in the Public Sector and Exemptions in the Public Interest – April 2011
The objective of the quantitative part of this study is to contribute to the economic justification for making a legislative proposal to resolve the issues surrounding the VAT treatment of vouchers, in particular issues arising from mismatches between Member States.
Therefore, the scope of the study is focused on both the actual and potential cross-border exposure. Even where there is limited evidence of actual cross-border trade, the potential may be sufficient to give rise to concerns.
The qualitative part of the study aims to provide an overview of the VAT rules that apply throughout the EU to prepaid telephone vouchers. This part only addresses pre-paid telephone vouchers because, according to the results of the study, this type of voucher is considered the most important in terms of monetary value.