VAT and the EU internal market: the paradoxes of harmonisation
in Dennis Weber (ed.), Traditional and Alternative Routes to European Tax Integration, Amsterdam: IBFD
Tax integration within the European Union can take place in many ways. In this book, various instruments which the Member States and the European Union have available to attain tax integration are discussed and their mutual relationship is studied.
WP 09/29 Rita de la Feria, VAT and the EC internal market: the shortcomings of harmonisation
Research Highlight 2010
VAT and the EC internal market: the shortcomings of harmonisation
From the outset, turnover taxes have played a fundamental role in the European integration process. Harmonisation of these taxes was perceived to be an integral part of achieving a common market, and for this reason it was given priority. Over forty years since the introduction of a common VAT system, VAT is usually regarded as a broadly harmonised tax. Paradoxically, however, it is precisely this high level of harmonisation which has permitted the preservation of some aspects of VAT law which constitute an obstacle to the establishment of the EC internal market. The aim of this project is to highlight the shortcomings of harmonisation within the VAT area. In particular, it addresses how harmonisation has prevented the European Court of Justice from applying the EC Treaty provisions to the field of VAT, resulting in the maintenance of laws which could arguably be regarded as contrary to the EC internal market and restricting the fundamental freedoms.