On the direction of tax harmonization in the european community
This chapter discusses the principles that should govern the coordination of the taxes that are levied by the Community’s member states. It examines main achievements in the field of tax harmonization since the Community was established in 1958. The chapter reviews some arguments for the preferability of tax diversity to tax uniformity. There may even be some reasons why a dose of tax competition among member states might do no harm. An important rule of “good” tax conduct that the member states of the European Community should adhere to is that their tax systems should have as few cross-border effects as possible. The prohibition on tax burden export cannot deal with the existing levies on natural resources that are charged to domestic as well as foreign users and the proceeds of which flow into the treasury of the source country. A number of additional complications will arise in a common market that increasingly acquires the characteristics of a domestic market.