Europe is bursting at the seams: tax inequality threatens the unity of the Union

Europe growing, but not uniting. According to data European Commission And EU Tax Observatorytax gap in EU reaches €220 billion annually – a sign of deep fiscal inequality.

European Union preparing for a new stage of expansion, but at the same time facing a growing internal crisis – fiscal inequality. Study EU Tax Observatory And European Commission showed that the difference between the taxes that should be received and the actual fees (tax gap) exceeds 220 billion euros per year.

Of this amount, about 54 billion is lost due to VAT fraud, and also 70 billion – through corporate tax optimization and offshore schemes. Average corporate tax rate in the EU – 19.6%but the spread is huge: from 12.5% in Ireland until 26.5% in France. As a result, almost 40% profits multinational companies are concentrated in just five low-tax countries.

This is how “Europe two speed“: capital moves freely, but tax liability remains national and uneven. It is more profitable for a business to change its address than to invest in real production. This trend is destroying the basis of European solidarity on which the idea of ​​integration was built.

Expansion and risk of fiscal gap

According to European Parliamentthe inclusion of new countries by 2035 – Serbia, North Macedonia, Ukraine – could increase the total EU GDP by 8%. But without tax harmonization this increase will increase inequality: the income gap between the center and the periphery could increase by two points. In new countries, the average corporate tax rate is about 15%and this can become a tool internal dumping and competition for investment.

As it warns IMFwithout coordination of tax policy, the European Union risks becoming a market of fighting jurisdictions, where low taxes will become a form political survival.

Greek example

Greece collects about 40% GDP in the form of taxes, but a significant part of the revenue comes from indirect taxes — VAT and excise taxes, which shifts the main burden to households. At the same time, the level tax evasion remains one of the highest in Europe. The country benefits from European funds but still lacks a sustainable tax base.

Brussels proposes steps towards equalization – introduction minimum corporate rate 15%mandatory publication of profits of transnational companies by country and the creation of a unified digital mechanism for tracking transactions. However, the key question remains: what kind of Europe do its leaders choose? — the one that protects competition, or the one that strives for equality?

Conclusion: EU enlargement without tax fairness may lead not to unification, but to a new one division within the Union. As long as money flows through the gaps in the system, and strong economies benefit from weak ones, European integration remains a promise without fulfillment.

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