Tax policy in the European Union

Taxation is central to national sovereignty, for without revenue governments cannot conduct policy. It is an instrument of economic regulation which can be used to influence consumption, encourage saving or shape the way in which companies are organised. Tax policy is essential to all Member States, and a country’s actions can have an impact not only at home but also in neighbouring countries. In the European Union’s single market, Member States need to work together and not strike out in different directions on tax policy.