- What can the EU do? -
Economic coordination of the national policies at EU level goes back to the very beginning of the European project in 1957, when the European Economic Community was created . Since then, eighteen Member States have pushed this coordination even further by adopting the euro as their currency. As a response to the current financial crisis, the EU has been trying to step up coordination efforts and to adopt a framework for strengthened fiscal and economic surveillance mechanisms (e.g. two pack, six pack, banking union, ESM) to ensure financial stability.
The responsibility for direct taxes lies however with the Member States. Yet, the EU can act in matters concerning the regulation of mostly indirect taxes, such as VAT, that may affect fair competition across the EU and the proper functioning of the single market. The latter - as one of the key features of the Union - enables people, goods, services, companies and money to move within the EU as freely as they do within a single country. The fight against tax evasion and tax fraud is one of the top priorities of the EU Commission. In June 2015, the Commission unveiled a series of initiatives to tackle tax avoidance, secure sustainable tax revenues and strengthen the Single Market for businesses. The proposed measures are part of the Commission’s Action Plan for fair and effective taxation.