Taxation and Customs Union

Decision making on EU Tax Policy

How is EU law on taxation adopted?

The European Commission proposes new EU law or amendments to existing EU tax law.
Currently, EU tax law is adopted through a special legislative procedure with the Council of the European Union or Council (comprised of representatives of all the Member States) as the sole legislator. The European Parliament is consulted.

On 15 January 2019, the European Commission presented a communication on how to move gradually from unanimity voting to the ordinary legislative procedure (where the European Parliament and the Council are co-legislators).

The special legislative procedure with consultation

Under the special legislative procedure with consultation, the Council is, in practice, the sole legislator adopting proposals.

The European Parliament is consulted and may approve or reject a proposal or propose amendments to it but the Council is not legally obliged to consider the Parliament’s opinion. Nevertheless, the Council cannot proceed to adoption until it has received the Parliament's opinion.

Under this special procedure, draft laws are adopted by unanimous vote of the Council. This means that every single Member State has to give its green light to the proposed legislation for it to be adopted.

Why does the current decision-making process on taxation policy need to change?

The need for unanimous agreement makes progress difficult, and limits the potential of EU taxation policy to support a well-functioning EU internal market:

  • The need for unanimous approval makes it very difficult to reach any compromise at all, because the veto of just one Member State alone is enough to prevent agreement.


This can lead to taxation proposals requiring years for Member States to agree, or to proposals simply being blocked in the Council without any discussion taking place.

  • Even when agreement is reached with unanimity, it tends to be at the lowest common denominator level, limiting the positive impact for businesses and consumers, or making the implementation more cumbersome than necessary.
  • Some Member States use unanimity as a bargaining chip against other demands they may have on completely separate files.
  • Decisions taken by unanimity can only be reversed or changed by unanimity. This often makes Member States overly cautious, dampening ambitions and weakening the final outcome.

A proposal to move to Qualified Majority Voting (QMV)

On 15 January 2019, the European Commission presented a communication on how to move gradually from unanimity voting to the ordinary legislative procedure.

The ordinary legislative procedure is already used for more than 80% of legislative procedures. It gives the European Parliament and the Council equal say in adopting the laws.

In the ordinary legislative procedure, proposals are adopted in the Council by Qualified Majority Voting (QMV).

How does Qualified Majority voting work?

When the Council votes on a proposal, a qualified majority is reached if two conditions are met:

  • 55% of Member States vote in favour
  • the proposal is supported by Member States representing at least 65% of the EU population

Given that both conditions are necessary, this procedure is also known as the 'double majority' rule.

A decision can still be stopped by a ‘blocking minority’, but this blocking minority must be formed by at least four Member States representing more than 35% of the EU population.

What will be the benefits of moving to Qualified Majority Voting?

Excluding the directly elected European Parliament from decision-making on such an important policy area as taxation, is at odds with the democratic goals of the European Union.

A move to QMV, under the ordinary legislative procedure, would rectify the democratic deficit and would allow the European Parliament to make a full contribution to shaping EU tax policy.
As such, the move should help to strengthen democratic legitimacy and accountability in EU tax policy.

In addition, moving to QMV would make the decision process on tax proposals faster and more adequate to tackle upcoming issues efficiently, resulting in better cooperation amongst Member States and thus better decision-making at EU level.

More coordinated and ambitious EU action would not only help to build a stronger and more dynamic Single Market but would also ensure a fairer tax environment at global level.