The EU Commission has released its 2019 Winter Semester Reports detailing the economic and social challenges and policies of each of the Member States. The Reports confirm the expectation that the European economy is expected to grow, with growth forecast for each Member State. However, imbalances remain in many of the Member States’ social and economic policies and situations.


The reports note that many Member States will continue to implement reforms to taxation systems, in particular to reduce taxation of labour. Latvia and Lithuania are introducing a revised personal income tax rate to that effect. Similarly, The Netherlands is reducing personal income tax whilst increasing value added tax rates. Germany and Ireland are also reducing labour tax rates for low and middle-income earners. In terms of resource management through taxation, it was noted that Denmark, Greece and Slovenia have a high rate of environmental tax revenue.


The reports note that in terms of tax planning, transposition of agreed initiatives by all Member States, such as the ATAD legislation, will help reduce tax avoidance, but that tax planning can be further curtailed by increasing the strength of national legislation, increasing administrative cooperation and transparency.


The Commission will now hold bilateral meetings with Member States concerning the findings and recommendations in the reports. Member States are then expected to incorporate fiscal strategies and reform priorities in their National Reform Programmes by mid-April. The Commission will thereafter develop further Country-Specific Recommendations on the basis of these Programmes.