In the aftermath of the financial and sovereign debt crisis, the need for a better understanding of the fiscal and equity implications of national tax policy reforms is greater than ever. National fiscal policies have a significant share in paving the way for economic recovery, fiscal consolidation and reducing looming inequality problems.
The JRC's main role is to provide research and modelling support to policy Directorates-General (DG) in the area of fiscal policy. We make use of two main modelling tools: the EUROMOD microsimulation model, which covers personal income taxation, social security contributions and social benefits and is currently being extended to cover consumption taxes; and the CORTAX model, which covers corporate tax reforms.
The EUROMOD model is primarily used to assess tax and social benefit reforms, in the context of the European Semester. Support through the use and extension of the EUROMOD model is provided to a number of policy DGs including DG Economic and Financial Affairs, DG Taxation and Customs Union, DG Employment, Social Affairs & Inclusion and the Structural Reform Service of the Commission's Secretariat-General.
The CORTAX model is used to assess the forthcoming Commission proposal for the harmonisation of Corporate Tax bases (CCCTB), being the DG Taxation and Customs Union the main partner as well as to support policy reforms in the area of corporate taxation in the context of the European Semester. Additional research is also currently developed to cover the taxation of corporate revenues related to intangibles (e.g. patent boxes) and R&D.
The above mentioned activities can be encompassed in three main research projects:
- Fiscal Policy in the European Semester: The European Semester is the EU's annual cycle of economic and fiscal policy coordination and it is part of the European Union's economic governance framework. The Commission analyses the economic and fiscal policies of the Member States, gives policy recommendations and monitors their implementation.
- Corporate Tax Policy: This project analyses policy issues relevant to EU countries, looking at how the system can effectively combine revenue collection with the objectives for growth and innovation.
- Thematic Research & Publications on Fiscal Policy: The thematic research on fiscal policy consists in a series of long-term studies which place analytical focus on topics related to fiscal policy simulations and modelling covering topics such as consumption taxation, labour markets, wealth taxation and tax evasion.
Image of a group of people discussing next to huge coins
Fiscal Policy Analysis
Economic Brief 057:Labour Tax Shift in Slovenia: Effects on Growth, Equality & Labour Supply
Science for policy briefs: Households' income and the cushioning effect of fiscal policy measures in the Great Lockdown
Marta Jędrych Villa