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Tax-based EU own resources: an assessment


  • Philippe Cattoir

    () (European Commission)


The ongoing intergovernmental conference (IGC) and the preparation of the "Financial Perspectives post-2006" i.e. the next multi-annual financial framework of the European Union, have led to new discussions on the issue of EU own taxes. As this issue is also likely to emerge regularly in future debates, it is useful to present a structured analysis of some of the pros and cons of giving taxing powers to the Union. Such an analysis has already been made in the past, notably in Agenda 2000, which presented the European Commission's position concerning the EU financial framework for the period 2000-2006. Several possibilities for a "genuine" or tax-based own resource (?EU tax?) were presented and assessed in Agenda 2000. However, that analysis requires revision and updating to take account of the considerable evolution of EU objectives and policies in recent years and to include an assessment of new possibilities, such as, for instance, a climate charge on aviation emissions. Eight criteria are applied to nine main candidates for EU taxation and comparisons are made with regard to these criteria. One of the main conclusions that can be drawn from this multi-criteria analysis is that there is no such thing as a perfect tax for the EU. All the main candidates that have been suggested for EU taxes have some pros and some cons. The inability of proposed EU taxes to meet fully certain criteria should not lead to the conclusion that these taxes should be dismissed, as has sometimes been argued in the past. On the contrary, the analysis presented here highlights the fact that the choice between one or several EU taxes would critically depend on a political choice as to which criteria should be considered essential and which secondary. Furthermore, an assessment of a tax as a possible candidate should ultimately have regard to its impact on the functioning of the overall financing system of the EU.

Suggested Citation

  • Philippe Cattoir, 2004. "Tax-based EU own resources: an assessment," Taxation Papers 1, Directorate General Taxation and Customs Union, European Commission, revised Apr 2004.
  • Handle: RePEc:tax:taxpap:0001

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    Cited by:

    1. Andrea Gebauer & Chang Woon Nam & Rüdiger Parsche, 2006. "VAT Evasion and Its Consequences for Macroeconomic Clearing in the EU," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(4), pages 462-487, February.
    2. Elżbieta Kawecka-Wyrzykowska, 2014. "Suggested changes of system of financing the EU budget: conclusions for Poland," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 39.
    3. Veronika Solilová & Danuše Nerudová, 2018. "Výnosový potenciál společného konsolidovaného korporátního základu daně v Evropské unii [Revenue Potential of the CCCTB in the European Union]," Politická ekonomie, Prague University of Economics and Business, vol. 2018(1), pages 78-98.
    4. Friedrich Heinemann & Philipp Mohl & Steffen Osterloh, 2009. "Who’s afraid of an EU tax and why?—revenue system preferences in the European Parliament," The Review of International Organizations, Springer, vol. 4(1), pages 73-99, March.
    5. Jorge Núñez Ferrer & Jacques Le Cacheux & Giacomo Benedetto & Mathieu Saunier & Fabien Candau & Claude Emonnot & Florence Lachet-Touya & Jorgen Mortensen & Aymeric Potteau & Igor Taranic, 2016. "Study on the potential and limitations of reforming the financing of the EU budget [Perspectives et limites pour réformer le financement du budget de l’UE]," Working Papers hal-01848029, HAL.
    6. Maciej Cieslukowski & Rui Henrique Alves, 2006. "Financial Autonomy of the European Union after Enlargement," FEP Working Papers 217, Universidade do Porto, Faculdade de Economia do Porto.
    7. Margit Schratzenstaller & Alexander Krenek, 2016. "Sustainability-oriented EU Taxes:The Example of a European Carbon-based Flight Ticket Tax," WIFO Studies, WIFO, number 58888, November.
    8. Iain Begg, 2007. "The 2008/2009 review of the EU budget: Real or cosmetic?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(01), pages 45-50, April.
    9. Spengel, Christoph & Heckemeyer, Jost Henrich & Bräutigam, Rainer & Nicolay, Katharina & Klar, Oliver & Stutzenberger, Kathrin, 2016. "The effects of tax reforms to address the debt-equity bias on the cost of capital and on effective tax rates," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, volume 65, number 148156.
    10. Jorge Núñez Ferrer & Jacques Le Cacheux & Giacomo Benedetto & Mathieu Saunier & Fabien Candau & Claude Emonnot & Florence Lachet-Touya & Jorgen Mortensen & Aymeric Potteau & Igor Taranic, 2016. "Study on the potential and limitations of reforming the financing of the EU budget
      [Perspectives et limites pour réformer le financement du budget de l’UE]
      ," Working Papers hal-01848029, HAL.
    11. Danuše Nerudová, 2013. "Taxing of financial sector as possible own resource of EU budget," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(4), pages 1051-1060.
    12. Iain Begg & Henrik Enderlein & Jacques Le Cacheux & Mojmir Mrak, 2008. "Financing of the European Union Budget," Sciences Po publications info:hdl:2441/10059, Sciences Po.

    More about this item


    European Union; taxation; budget; own resources; VAT; CIT;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation


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