The subject of this paper is the fiscal system of the European Union. There is no common fiscal policy in the European Union. The central government of the European Union is made up of EU institutions which directly or indirectly deal with fiscal issues. The structure of the European Union's fiscal system is specific in relation to national fiscal systems, which includes the EU budget, tax harmonization and coordination of stabilization fiscal policies. In the European Union the fiscal policy of member states is disciplined by certain fiscal rules contained in the Stability and Growth Pact and the Maastricht convergence criteria. The model of fiscal federalism in the European Union deviates from the concept in national states. In the functions of public finances (allocation, redistribution and stabilization function), deviations can be observed in relation to what recommends the theory of fiscal federalism. In the European Union a process of fiscal decentralization is being implemented, i.e. the redistribution of financial powers to the benefit of lower levels of government. In the context of the European Union this means that financial powers are reallocated to the benefit of the lower levels of government, which is the national authorities of member states. The fiscal system and fiscal policy of the European Union are complex and specific in view of the special features of the European Union, i.e. the community that makes 28 European member states that are in many different ways different.