The Directorate-General for Taxation and Customs Union (DG TAXUD) is a Directorate-General of the European Commission.[1][2][3] The DG Taxation and Customs manages, defends and develops the customs union as a vital part of protecting the external borders of the European Union.[4] It also co-ordinates taxation policy across the European Union.[4]
Tax burden as a percentage of GDP in EU Member States in 2008, a topic relevant to DG TAXUD's policy scope.Annual average change in environmental tax revenues versus labour tax revenues in EU Member States between 2002 and 2019, reflecting EU taxation policy trends.Map illustrating the standard Value Added Tax (VAT) rates across the European Economic Area (EEA), which is a key policy area for DG TAXUD.
The European Union's competence in Taxation is focused on harmonisation, primarily through the Treaty on the Functioning of the European Union (TFEU).[6]Article 113 TFEU serves as the core legal basis, granting the EU power to harmonize indirect taxes (such as VAT and Excise Duties) when necessary to ensure the proper functioning of the Internal Market. For certain forms of direct taxation and other measures impacting the single market, Article 115 TFEU allows the Council to adopt directives aimed at approximating national laws, enabling the EU to coordinate policies like anti-tax avoidance measures[7].
Structure
The Directorate-General is presently organised into five directorates:[8]
Directorate B: Digital Delivery of Customs and Taxation Policies[10]
Directorate C: Indirect Taxation and Tax Administration[11]
Directorate D: Direct taxation, Tax Coordination, Economic Analysis and Evaluation[12]
Directorate E: International and General Affairs[13]
The department is headed by Director-General Mr Gerassimos Thomas, a Greek national. Since January 2022, Mr Thomas is supported by a Principal Adviser for Strategy and Economic Analysis Coordination.
Previously, the Directorate-General was organised into the following five directorates:[14]
↑The supply and demand model illustrates the three primary economic effects of a tax: 1. First, the tax creates a vertical gap between the pre-tax and post-tax supply curves, causing a market contraction where the quantity exchanged drops from Q(0) to Q(t), simultaneously raising the price for consumers q(t) and lowering the price for producers p(t). 2. Second, the resulting Tax Revenue is explicitly shown as a rectangle, and the model details tax incidence, partitioning the burden into consumer and producer shares. 3. Third, and most importantly, the tax introduces an Economic Inefficiency called Deadweight Loss (DWL), represented by a triangle, which signifies the value of lost, mutually beneficial transactions that are discouraged by the tax, with this loss growing rapidly as the tax rate increases. A standard economic model illustrating the imposition of a tax on a market, demonstrating the resulting deadweight loss and changes in consumer and producer surplus.
↑The image tracks the Tax Burden (as a percentage of GDP) in a major EU economy over decades. This metric is a central concern for EU tax policy coordination, stability, and competition, which is the subject of the Article 113 TFEU. Tax revenues as a percentage of GDP in Germany (1975–2005), illustrating national tax trends relevant to EU harmonization efforts.
↑The image, showing the Apple/Ireland State Aid case, relates to the Taxation side of DG TAXUD's mission, even though the investigation was conducted by the Directorate-General for Competition (DG COMP). The legal basis for this action is State aid rules (Article 107 TFEU), which prevent Member States from giving preferential tax treatment that distorts competition. The Commission effectively used competition rules to tackle illegal tax avoidance schemes that undermine the Single Market. Visual representation related to the high-profile EU State Aid case involving Apple and Ireland, a major issue in the context of EU taxation and competition policy.
↑The Directorate B (Digital delivery of Customs and Taxation Policies) is responsible for the digital transformation of both customs and taxationpolicies, this Directorate develops and manages the critical IT systems, architectures, and data integration necessary for both customs operations and tax information exchange across the EU.
↑The Directorate C (Indirect taxation and tax administration) focuses on setting and administering policy for Indirect Taxation, including Value Added Tax (VAT) policy, green taxation (such as the Carbon Border Adjustment Mechanism or CBAM), and ensuring administrative cooperation and enforcement across Member States.
↑The Directorate D (Direct taxation, Tax coordination, Economic analysis and Evaluation) handles all aspects of Direct Taxation, working on initiatives for company taxation, tax fairness, international tax policy (e.g., ATAD, CCCTB), and conducting economic analysis and evaluation to support all tax-related legislative proposals.
↑The Directorate E (Resources and General Affairs) provides the necessary internal support and resources for TAXUD, managing finances, public procurement, human resources, and handling inter-institutional relations, communication, and strategic planning for the entire Directorate-General.
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