Disparity of national tax systems

When countries which are trading partners make use of tax systems which are not harmonized, this may introduce considerable obstacles to effective trade, particularly when the trading partners are within an economic union or common market. Differences in fiscal systems may lie in their basic structures, in the way they make use of a certain tax, or in the proportion of direct to indirect taxation. One view argues that taxes should be uniform throughout such a common market in order to equalize opportunity for business enterprises in all countries of the market and to prevent distortions of free competition. Another view holds that complete uniformity may in fact impair the international flow of capital and that an optimum degree of non-uniformity is necessary.
(D) Detailed problems