Taxation and Customs Union

Studies made for the Commission

2018

The Concept of Tax Gaps Report II:
Corporate Income Tax Gap Estimation Methodologies

The report aims at mapping different methodologies and approaches for estimating the Corporate Income Tax (CIT) gaps. The CIT Gap is the gap between corporate tax revenues as they “should be” collected and as they “are” collected. The gap is therefore an indication of potential CIT revenue losses. The report provides an overview of CIT gap estimation methodologies used by Member States or other jurisdictions, and reviews selected methodologies developed by researchers and international organisations.

The report discusses the strengths and weaknesses of the methodologies, provides useful elements for tax administrations or any other interested party to identify which methodology they could consider to estimate the CIT gap, depending on their needs, data availability, resources, timeframe. The report is prepared by the Tax Gap Project Group (TGPG) under FISCALIS 2020 programme and it is the second report following the first report on VAT Gap Estimation methodologies.
07/2018

Study on Council Directive 92/83/EEC on the harmonization of the structures of excise duties on alcohol and alcoholic beverages

Final Report
Annex
Executive Summary

The purpose of this Study is to contribute to the Impact Assessment of a possible revision of Council Directive 92/83/EEC on the harmonization of the structures of excise duties on alcohol and alcoholic beverages. The Study includes a baseline assessment of a series of issues, which emerged from the previous evaluation of the Directive and analyses how these problems may evolve if no EU action is taken. Secondly, the Study formulates a set of possible policy options to address these problems and assesses their likely impacts.
06/2018

'Effective tax rates in an enlarged European Union' – (Report 2017)

The project 'Effective tax rates in an enlarged European Union' is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003). The project includes a focus on the effects of tax reforms in the EU28, FYROM and Turkey as well as Norway, Switzerland, Canada, Japan and the United States for the period 1998-2017 and their impact on the level of taxation for both domestic and cross-border investment.

Excel tables

01/2018 (correction made in August 2018)
Scientific-technical support activities to DG TAXUD-C-2 on the option to include e-cigarettes within the scope of excisable goods for the Impact Assessment on a possible revision of Directive 2011/64/EUThe market of electronic cigarettes and corresponding e-liquids experienced in recent years enormous growth. Some EU Member States reacted on this development and introduced excise duties on e-liquids. The partial introduction of excise duties in the common market and the lack of harmonisation of their magnitude might cause distortions of the market. For that reason, the Directorate-General Taxation and Customs Union (DG TAXUD) commissioned a study on the identification and characterisation of e-liquids.

Study on Council Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco

Main text (English only)
Executive Summary (en-de-fr)

The purpose of this Study is to contribute to the Impact Assessment of a possible revision of Council Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco. The Study includes a baseline assessment of a series of issues emerged from the previous evaluation of the Directive and analyses how these problems may evolve if no EU action is taken. Secondly, the Study formulates a set of possible policy options to address these problems and assesses their likely impacts.

05/2017

 
 
2017 

Effectiveness of tax incentives for venture capital and business angels to foster the investment of SMEs and start-ups – Final report

Tax incentives have become an increasingly important part of the investment and innovation policy mix in the EU and beyond. This study investigates the part that tax incentives for venture capital and business angels can play in fostering investment, with the intention of promoting the diffusion of best practice across Member States. The study is an action of the Capital Markets Union project that aims to strengthen the single market by deepening the integration of investment across the European Union. Improved access to finance is a key component of this project, in particular for start-ups, SMEs, and young companies with innovative growth plans.

08/06/2017

'Effective tax rates in an enlarged European Union' – (Report 2016)

The project 'Effective tax rates in an enlarged European Union' is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003). It extends the scope of the calculation of ETRs conducted under the study on effective levels of company taxation within an enlarged EU (2008). The project includes a focus on the effects of tax reforms in the EU28, FYROM and Turkey as well as Norway, Switzerland, Canada, Japan and the United States for the period 1998-2016 and their impact on the level of taxation for both domestic and cross-border investment.

01/2017

 
2016  

Study on the application of economic valuation techniques for determining transfer prices of cross border transactions between members of multinational enterprise groups in the EU

This study, prepared by Deloitte, provides an overview on how valuation techniques can practically and most efficiently be used for transfer pricing purposes in the EU, particularly for transactions involving intangibles. The information to support the study was gathered through desk research and interviews with transfer pricing and corporate finance valuation specialists from all EU Member States and nine of the EU’s main trade partners. The study investigates the differences between valuations for transfer pricing purposes and valuations for other purposes, and the state of play in terms of experience of the EU Member States and trade partners.

20/12/2016

Final report

Executive Summary

Study on comparable data used for transfer pricing in the EU

This study, prepared by Deloitte, aims at providing an overview and assessment of the availability and quality of market data ('comparables') used for transfer pricing purposes and, more specifically comparable searches under the Comparable Uncontrolled Price (‘CUP’) method and under the Transactional Net Margin Method (‘TNMM’)in the EU-28 Member States. More specifically, the study covers the following aspects: Assessing and evaluating situations characterising the lack and / or non-reliability of comparable data; Assessing and evaluating the situation for pan-European comparable searches ; Developing and envisaging EU-tailored solutions and possible adjustments taking into consideration some advantages and assets offered by the EU internal market ; Contribute to strengthening and effectively implementing an improved EU transfer pricing framework and fight against aggressive tax planning.

20/12/2016

Final report

Executive Summary

Options for modernising VAT for cross-border E-Commerce

This study, prepared by Deloitte, supports the December 2016 proposal by the Commission to modernise VAT for cross-border e-commerce. The Study is in three lots.
Lot 1 - Economic analysis of VAT aspects of e-Commerce
Lot 2 - Analysis of costs, benefits, opportunities and risks in respect of the options for the modernisation of the VAT aspects of cross-border e-Commerce
Lot 3 - Assessment of the implementation of the 2015 place of supply rules and the Mini-One Stop Shop

01/12/2016

The Concept of Tax Gaps – Report on VAT Gap estimations

This report, prepared by the Fiscalis Tax Gap Project Group, provides an introduction to the methodologies currently applied to estimate tax gaps, with its main focus on VAT gap estimations. Tax gap estimations are rough indicators of revenue loss and over the last decade several methods have been developed by national (tax) administrations and international institutions to estimate these losses. This report presents the most important aspects of tax gap estimations in order to provide a better understanding of the estimation methodologies and to share information with a broader public.

11/03/2016

Evaluation of current arrangements for the holding and moving of excise goods under excise duty suspension

Link to the final report in English

Link to the executive summary in English, French and German

This Study evaluates the current arrangements for the holding and movements of excise goods under excise duty suspension (Chapters I to IV of Council Directive 2008/118/EC) and presents the findings of the evaluation following the sequence of the arrangements for holding and movement (i.e. authorisations, guarantees, movement and holding of specific products, shortages, excesses, exemptions and export and exit from the customs territory of the Union). The study looks as well at the cost effectiveness, the effectiveness to tackle fraud and the EU added value of the Excise Movement and Control System (EMCS). The report proposes some recommendations in order to improve this type of trade.

The Study was prepared on the basis of data collected throughout written consultations, on line surveys and interviews with selected Member States administrations, economic operators and consumer organisations.

The Study is accompanied by the Executive Summary and an Appendix which provides the details of the feedback received through the comprehensive surveys.

03/02/2016

 

2015  

'Effective tax rates in an enlarged European Union' – (Intermediate Report 2015)

The project 'Effective tax rates in an enlarged European Union' is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003). It extends the scope of the calculation of ETRs conducted under the study on effective levels of company taxation within an enlarged EU (2008). The project includes a focus on the effects of tax reforms in the EU28, FYROM and Turkey as well as Norway, Switzerland, Canada, Japan and the United States for the period 1998-2015 and their impact on the level of taxation for both domestic and cross-border investment.

10/2015

Study on the Fiscalis 2020 and Customs 2020 Performance Measurement Framework - Final Study Report

The study aims at contributing to and completing the draft performance measurement framework developed by the EC to enable the measurement of the Customs and Fiscalis 2020 programmes’ implementation, processes and results using a comprehensive, detailed and feasible monitoring system. It focusses on the functioning of the programmes and their outputs, results and long term impact, without assessing in-depth the underlying tax/customs policy.

2/10/2015

2013 Update Report to the Study to quantify and Analyse the VAT Gap in 26 EU Member States

 

This report provides estimates of the VAT Gap for 26 EU Member States for 2013, as well as revised estimates for the period 2009-2012. It is a follow-up to the “Study to quantify and analyse the VAT Gap in the EU-27 Member States”, published in October 2014. See the press release (IP/15/5592) and the frequently asked questions (MEMO/15/5593).

4/08/2015

Study on implementing the VAT ‘destination principle’ to intra-EU B2B supplies of goods

 

The study carried out by the Commission analyses five policy options for tackling two essential issues in the current VAT system: the additional compliance costs borne by businesses that conduct cross-border trade when compared to those businesses that only trade domestically and the occurrence of VAT fraud. The five policy options are designed to enable the implementation of a destination based VAT system across the EU.

13/07/2015

Assessment of the application and the impact of the VAT exemption for importation of small consignments

Final report

Executive summary

 

The EU VAT Directive provides for a VAT exemption on the importation of small consignments below the EUR 10/22 threshold. This exemption is implemented by all 28 EU Member States. The Study carried out for the Commission presents an overview of the legal framework and procedures in place in the 28 EU Member States, as well as an economic analysis of the low value consignments market from 1999 until 2013, including an estimation of the potential VAT foregone by tax authorities due to this exemption

22/05/2015

Evaluation of current arrangements for movements of excise goods released for consumption

Final report

Executive summary

 

This Study evaluates the current arrangements for movements of excise goods that have been released for consumption (Chapter V of Council Directive 2008/118/EC) and proposes some careful recommendations in order to improve this type of trade. The Study covers intra-EU movements of excisable consignments between traders and distance selling of excise goods to private individuals. Personal purchases by travellers for their own use and transported by the traveller himself, in accordance with Article 32 of the Directive, are excluded from the scope of the study.

The Study was prepared on the basis of data collected throughout written questionnaires, on line surveys and interviews with selected Member States administrations, economic operators and consumer organisations.

The Study is accompanied by the Executive Summary and an Appendix which provides the details of the feedback received through the comprehensive surveys.

10/04/2015

Economic Study on Publications on all Physical Means of Support and Electronic Publications in the context of VAT

Final report

Abstract

Annex A

Annex B

Annex C

 

 

The study aims at assessing the substitutability between physical and electronically-supported publications; evaluating the impact of current VAT reduced rates; and evaluating the impact of extending either the reduced rate or the standard rate regime to all kinds of publications.

20/03/2015

VAT rates structure

Final report

Addendum

Annex 1

Annex 2

 

The study assesses the main economic effects of the current VAT rates structure and the economic effects that would follow from abolishing zero and reduced rates, under various hypotheses, including the introduction of compensatory measures.

20/03/2015

Study on the economic effects of the current VAT rules for passenger transport

Volume 1

Volume 2

Volume 3

The current VAT rules for passenger transport activities can create distortions of competition, notably owing to differences among Members States in the application of VAT exemptions or reduced rates. Even where exemptions or reduced rates do not apply, the complexity of the current place-of-supply rules increase compliance costs and may cause voluntary or involuntary non-compliance.

Since the last large-scale review in 1997, the passenger transport sector has changed in a considerable way, as a result of the greater impacts of airline deregulation, implementation of rail concessioning, and the deregulation of bus transport. The cruise industry has also changed and experienced high growth. Hence, the importance of the distortions has increased.

This study contributes to the debate on possible options for reform by providing a summary of the current state of the passenger transport market, a review of the current VAT regime, an assessment of the impact of many of the distortions and an evaluation of some alternative VAT solutions on which a future improved VAT regime for the transport sector might be based.

15/01/2015


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