Europe's New Border Taxes

22 Pages Posted: 2 Dec 2002

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)

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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. The figure is probably higher for other EU Member States. Obviously, the costs constitute a (differentiated) border tax that impedes intra-EU trade. The article analyses the determinants of the compliance costs, as well as their effect on intra-EU trade intensity. The article submits that the differential compliance costs violate the non-discrimination provisions of the EC Treaty. Suggestions are made to reduce them.

Suggested Citation

Verwaal, Ernst and Cnossen, Sijbren, Europe's New Border Taxes. Journal of Common Market Studies, Vol. 40, pp. 309-330, 2002. Available at SSRN: https://ssrn.com/abstract=316067

Ernst Verwaal (Contact Author)

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

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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