The European Union (EU) has long acknowledged that a more harmonised tax policy framework is essential to deepen economic integration, strengthen the Single Market, and enhance the bloc’s global competitiveness. Despite incremental progress, significant divergences in national tax rules and practices continue to hinder cross-border economic activity, distort competition, and create administrative burdens for businesses operating in multiple Member States. These disparities contribute to what is often referred to as the “Cost of Non-Europe”, the economic and social losses resulting from the absence of coordinated EU action.
This study seeks to quantify and qualify that cost in the specific context of tax policy. It aims to identify the main challenges posed by fragmentation, assess the efficiency and equity implications of divergent national tax regimes, and explore policy options for greater harmonisation. In doing so, the study provides a comprehensive analysis of the potential benefits and trade-offs involved in moving toward a more integrated and future-proof EU tax system. Its findings are intended to inform EU policymakers as they consider reforms that could support a fairer, more transparent, and more competitive tax environment across the Union.
The study is led by CEPS involving subcontractors.
