Background Analyses

Before we proceed to the analysis of reform options for the revenue side, two background analyses are presented. First, the degree of tax system and tax preference heterogeneity within the EU is scrutinised. Secondly, an overview is given on revenue systems of international and supranational organisations.

The study on tax system heterogeneity sheds light on the question to which extent a continuing divergence of national tax preferences in Europe exists. One argument which, in principle, speaks in favour of the current system of EU own resources is that this de facto contribution system gives member countries free choice of how to refinance their payments to the EU budget – at least with respect to GNI and VAT own resources which constitute the bulk of current revenue. By contrast, any movement towards a uniform EU tax would tend to eliminate such autonomy. This argument is even more important the more diverse taxation systems and taxation preferences are among EU countries. The freedom to choose how to refinance contributions to the European budget is a greater advantage if member countries still differ with regard to their tax system preferences.

A glance at international organisations is helpful for comparisons and may function as a source of inspiration for the development of EU reform options. Given that the EU has achieved a much deeper level of integration compared to any other international organisation, naïve comparisons would be inadequate. However, this does not preclude the usefulness of these case studies.