Europe's New Border Taxes

20 Pages Posted: 1 May 2001

See all articles by Ernst Verwaal

Ernst Verwaal

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship; Queen's University Management School; Erasmus Research Institute of Management (ERIM)

Sijbren Cnossen

University of Maastricht - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2001

Abstract

Instead of abolishing internal border controls in 1993, the European Union (EU) replaced them with VAT and statistical requirements that appear to be just as onerous. For Dutch businesses, the compliance costs of the new requirements are, on average, 5 per cent of the value of their intra-EU trade. This figure is probably higher for other EU Member States. Obviously, the costs constitute a (differentiated) border tax that impedes intra-EU trade. The paper analyses the determinants of the compliance costs, as well as their effect on intra-EU trade intensity. The paper submits that the differential compliance costs violate the non-discrimination provisions of the EC Treaty. Suggestions are made to reduce them.

JEL Classification: F2, H2

Suggested Citation

Verwaal, Ernst and Cnossen, Sijbren, Europe's New Border Taxes (March 2001). CESifo Working Paper Series No. 434. Available at SSRN: https://ssrn.com/abstract=267834

Ernst Verwaal

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship ( email )

RSM Erasmus University
Rotterdam, 3000 DR
Netherlands

Queen's University Management School ( email )

25 University Square
Belfast
United Kingdom

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Sijbren Cnossen (Contact Author)

University of Maastricht - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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