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Annual Report on Taxation 2021 - Review of taxation policies in the EU Member States

Author: Directorate-General for Taxation and Customs Union
Price FREE
Publisher European Commission
Publication date 19 May 2021
ISBN 978-92-76-19995-3
Publication synopsis This report describes and assesses progress by EU Member States in bringing their tax policies in line with the EU’s main tax priorities to: foster innovation and productivity, thus supporting an EU economy that is fit for the digital and global challenges; pave the way for environmental sustainability and good public health, thus contributing to climate-neutral and more resilient economies; fight tax fraud, evasion and abuse, thus ensuring that everybody pays their fair share; and contribute to social fairness and prosperity, thus ensuring an economy that works for people and addresses their needs. With those priorities in mind, this report identifies relevant indicators and potential improvements of tax systems in terms of tax design, implementation and compliance. The report finds that taxation can play a key role in supporting Europe’s recovery. The COVID-19 pandemic has created a severe crisis in Europe and the world. Citizens face an increased risk of poverty, our public health systems have been put under stress, many companies are over-leveraged, and tax revenue is likely to decrease in the coming years due to the pandemic. Member States should take the recovery as an opportunity to reform their fiscal framework and to address challenges brought by climate change, environmental degradation, ageing of population, digitalisation and globalisation. A well-designed tax policy response can help to increase fairness and generate much needed and sustainable revenue to recover from this crisis. It can also help foster innovation and productivity to improve the resilience of our economies and restore a more solid capital structure. By evaluating European tax policies in the light of the European Commission’s priorities of investment, environmental sustainability, the fight against tax abuse, tax certainty and fair taxation, this report informs the reader about certain aspects of taxation under the Recovery and Resilience Facility, which is at the centre of the NextGenerationEU instrument. The Annual Report on Taxation 2021 examines how EU Member States' tax systems help to achieve the EU Commission’s priorities, most notably: ensuring that the digital transition works for all; developing, modern, resource-efficient economies that are climateneutral; creating a more attractive investment environment; and simulating growth that helps to reduce poverty and inequality.

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