One taxation system for all in eu and an end to tax havens

1. Why the EU already acts like a partial tax union — and where it stops

Over the past decade the EU has steadily layered coordination tools — from VAT harmonisation and the Directive on Administrative Cooperation to the recent DAC9 rules facilitating Pillar Two reporting — that reduce cross-border loopholes without creating a single tax code, reflecting an approach of approximation rather than full harmonisation because tax remains a member‑state prerogative and many reforms still require unanimity ^{[1] [2] [5]}.

2. Concrete instruments that push toward a single system

The bloc has operational levers: DAC9 standardises exchange of information and reporting forms for minimum effective taxation, Pillar Two sets a global minimum tax floor applied via EU directives, BEFIT aims to harmonise corporate tax bases for large groups, and the EU list of non‑cooperative jurisdictions enables coordinated defensive measures — together these narrow avoidance opportunities and create a de‑facto common layer of rules even without single rates ^{[2] [3] [6] [4]}.

3. Political and legal roadblocks that make a single system hard

Any move from coordinated rules to one taxation system bumps into the constitutional reality that direct taxation is national, the political power of low‑tax member states (some of which have benefited economically from their regimes), and the unanimity rule in many tax areas; critics warned when BEFIT was proposed that unanimity lets tax‑haven member states block deeper integration ^{[1] [3]}.

4. Ending tax havens: achievable tactics, limited reach

The EU can substantially blunt tax havens’ influence by consistent blacklisting, conditional withholding taxes, tighter CFC rules, and automatic information exchange — measures some member states already deploy and which the Commission and Council have reinforced recently — but external havens outside EU jurisdiction require multilateral OECD/G20 alignment and unilateral defensive steps that can shift but not instantaneously eliminate tax‑haven activity ^{[7] [4] [2]}.

5. Economic trade‑offs, winners and losers

Harmonising tax bases and enforcing minimum effective taxation would raise revenues and reduce profit‑shifting, with estimates showing new digital taxes or DSTs could generate significant sums for the EU budget, yet governments and regions that compete on low rates — and some multinational planning models — would see reduced advantage, prompting domestic reforms and political pushback that may slow implementation ^{[8] [9]}.

6. A pragmatic road map toward convergence

A staged strategy that the EU is already following would combine immediate transparency and defensive measures (DAC9, EU non‑cooperative list), medium‑term adoption of common tax base rules like BEFIT and Pillar Two implementation across member states, and longer‑term institutional change such as qualified‑majority voting in selected tax areas and an EU Tax Data Hub to reduce administrative fragmentation — this path advances a single system by accretion rather than a single legislative leap ^{[2] [10] [3]}.

7. The politics beneath the policy — interests and implicit agendas

Reform advocates (Commission, many MEPs, tax justice NGOs) frame harmonisation as fairness and fiscal sustainability, while low‑tax jurisdictions and some business lobbies warn of competitiveness loss; reports and proposals must be read against these interests, since member states with competitive advantages have an implicit agenda to preserve fiscal autonomy and attract mobile capital ^{[3] [8]}.

Conclusion

A genuine one‑tax‑system EU and the complete disappearance of tax havens are strategic objectives reflected in current measures, but they require overcoming legal sovereignty, political resistance and global coordination challenges; success is likelier through incremental harmonisation of bases, stronger transparency and coordinated defensive measures than through an immediate, single EU tax code ^{[1] [2] [3] [4]}.