tax harmonization

Tax harmonization refers to the process of aligning tax rules and rates across different countries or regions to reduce disparities and simplify cross-border economic activities. This can involve setting common standards for income taxes, VAT, or other levies to promote fair competition, prevent tax evasion, and facilitate international trade and investment. While complete harmonization is challenging due to national sovereignty, coordinated efforts aim to make tax systems more compatible, fostering economic stability and cooperation without overly restricting individual countries’ fiscal policies.