Tax Harmonization: The Case of the Economic Agreement between Spain and the Basque Country

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In many countries, regions have been given a more prominent role in the process of economic policy making and have secured a greater degree of autonomy from the state. Among other things, this is often the case in the field of fiscal relations between regions and the state. This volume seeks to analyse such relations between the Basque Country and Spain, where the Spanish State concluded an Economic Agreement with the Basque Autonomous Community. This agreement, which is unique of its kind, regulates the tax and financial relations between the Spanish State and the Basque Country. The book explains the peculiarities of the particular mechanism that are used in the Economic Agreeement and which regulate the fiscal relations between the two different layers of government. The study also discusses the theoretical arguments for fiscal harmonization. Finally, the question of comparative tax burdens in the Basque Country and the rest of Spain is addressed.

The study was financed by the Banco Bilbao Vizcaya Foundation in Bilbao and carried out by the European Institute of Public Administration in Maastricht.