The European Commission has published its annual report on ‘Tax Policies in the European Union: 2020 survey‘ which outlines how Member States’ tax systems perform in terms of fighting tax abuse, promoting sustainable investment, supporting job creation and employment, and mitigating inequalities.

The report also provides an overview of recent tax reforms at EU and Member State level. It shows that there is evidence that multinational enterprises continue to engage in aggressive tax planning in order to decrease their tax burden. Each year, billions of euros in tax revenue are also lost in the EU because of international tax evasion by individuals.

The report finds that taxation is more than just about raising revenue but also plays a central role in shaping a fairer society. While the EU is faring relatively well compared to other parts of the world, there is significant income and wealth inequality in our societies. The overall structure of the tax system plays a role in addressing this, as well as boosting employment.

The right tax policies can also play a role in supporting the green transition. For example, in 2019, in all but two Member States, the nominal marginal tax rates on diesel for private road usage are lower than those for unleaded petrol, even though diesel has a higher carbon content and greater negative impact on ambient air quality. New elements of this year’s edition include discussions on tax competition, the sustainability of tax systems in a changing world, and the design and distribution of the overall tax mix.

The report also presents the main indicators used by the European Commission to analyse tax policies in the context of the European Semester and substantiates the tax policy priorities of the Commission’s Annual Sustainable Growth Strategy in this field.

Download the report here.

Tax data for EU Member States also has been updated to include data up to 2018. Access here.

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