CONSIDERATIONS ON FISCAL HARMONIZATION IN THE EU IN THE FIELD OF VALUE ADDED TAX

The proper functioning of the European internal market would be impossible withoutfiscal harmonization. The main objective of fiscal harmonization process is the prevention ofdistortions of the competitive process and the attainment of an equitable allocation of financialresources between Member States. The aim is not to realize a uniform tax system for the MemberStates of the Union, but achieving a minimum level of harmonization of the national tax systems, inorder to prevent harmful fiscal competition between member States. The paper at hand presents themajor aspects of fiscal harmonization in general and some aspects of fiscal harmonization in thefield of value added tax (VAT) from an interdisciplinary perspective. The paper analyzes the majorlegal instruments used in the context of the harmonization process. It also refers to the mainobstacles in achieving the objective of harmonization, such as the rule of unanimity at the adoptionof measures at the Union level and proposes some solutions. The authors also try to explain why thedirectives are the mainly used legislative instruments in the context of harmonization process. Theultimate objective of the recent adopted EU tax rules in the field is the creation of a tax systembased on the principle of taxation at the origin, in order to reduce the administrative burden ontaxpayer and to prevent illegal capital movement between Member States. The final part of thepaper presents the major characteristics of the actual common system of VAT applicable in theEuropean Union and mentions some of the major obstacles in attaining the above mentionedobjective regarding the establishment of a more efficient tax system in the field of VAT.