From total to structural harmonization in the field of European direct taxation

Among economic policy questions remaining without a definitive response perhaps none are as contentious asthe future of direct taxation within the European Union. In this paper I intend to express my opinion regarding the issueof Tax Harmonization versus Tax Competition which has been globally debated over the last decades and which is stillconsidered extremely controversial at the European level. Studying the researches in the specified area corroboratedwith empirical evidence I summarized myself some key questions: Has indeed national tax systems a negative effect onEU market integration? Is indeed tax harmonization critical to the operation of the Single Market so that goods,services, people and capital can move freely around the EU? There are some questions appreciated as very importantwhich I try to answer in this paper. Specifically, this paper encourages the Commission and member states to acceptthe beneficial role of tax competition in limiting the over-expansion of EU jurisdictions. Given that tax harmonization isan almost impossible goal for European Union, and on the other hand so many national different tax regulations poseproblems for all companies doing business abroad, the solution would be consolidation of the tax rules.