The EU has limited competences in the area of taxation. The EU aims to tackle the tax obstacles that prevent individuals and companies from operating freely across borders and from exploiting the benefit of the Internal Market. It encourages changes to tax systems so that they support Community objectives such as competitiveness and sustainable development.

With regard to taxation at EU level, the most important issue for the hospitality industry is the area of value added tax (VAT).

Decisions on legislation concerning taxation matters require unanimity in the Council. The European Parliament is only consulted.