Lessons of the 1999 Abolition of Intra-EU Duty Free Sales for Eastern European EU Candidates
AbstractAt the end of June 1999 the intra-EU duty free shopping was abolished among the fifteen member nations. The opponents of this resolution argued that such a tax-free sales sector created jobs EU-wide and hardly reduced the value added and excise tax revenue of individual countries. In their opinion, the duty free trade not only contributed to the reduction of the travel fare within the EU but also could be characterised as a supplement to the normal retail trade for some products. Such ‘old’ ideas are increasingly gaining popularity in some Eastern European EU candidates in the context of the preparation process for the introduction of the Single Market and the EU membership in the near future. This study primarily shows that the arguments mentioned above were neither significant enough nor conclusive to maintain the intra-EU duty free shopping. Furthermore, the abolition of such tax free sales was approved in the EU in order to ensure the allocation efficiency of the VAT and excise tax system within a single market. Several arguments against the intra-EU tax free shopping examined in the study provide some helpful policy orientations for EU membership candidates.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 828.
Date of creation: 2002
Date of revision:
duty free shopping; EU single market; value added and excise tax harmonisation; eastern european candidates;
Other versions of this item:
- Andrea Gebauer & Chang Woon Nam & Rüdiger Parsche, 2004. "Lessons of the 1999 Abolition of Intra-EU Duty Free Sales for Eastern European EU Candidates," ERSA conference papers ersa04p204, European Regional Science Association.
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- Vidar Christiansen & Stephen Smith, 2001. "The Economics of Duty-Free Shopping," CESifo Working Paper Series 595, CESifo Group Munich.
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