Parliament's Economic and Monetary Affairs committee last night approved a report by Olle Schmidt (Folkpartiet, Sweden) on the EU's Annual Tax report. The report focuses on the tax initiatives taken by the Commission during 2011 and on areas where further initiatives are necessary in order to improve the functioning of the Single market and to create a more competitive Europe. It focus on removing cross-border tax obstacles for EU citizens and businesses, as well as preventing tax fraud and increasing tax transparency.

The report also addresses tax problems that EU citizens face in cross-border situations within the EU. For example, EU citizens working or investing in another EU Member State who encounter issues of double taxation and have difficulties with obtaining allowances, tax reliefs or deductions from foreign tax authorities.

The European Parliament's rapporteur said:

"I welcome that the Commission recently adopted a Communication on Double Taxation, where concrete measures are announced, including the creation of an EU Forum to develop a code of conduct on double taxation and a binding dispute resolution procedure for unresolved double taxation cases. This is an area where the European Union can make a real and practical difference to EU citizens."

A public consultation carried out by the Commission found that more than 20% of reported cases of double taxation of businesses were worth over €1 million, while for individuals, more than 35% of double taxation cases were worth more than €100 000.

Note to the editor:

Taxation is mostly a national and not an EU competence. Nevertheless, the financial and economic crisis  has revealed the risks posed to the Single Market by contradictory tax policies and the need for closer coordination. The EU Treaty foresees only simple consultation of Parliament and unanimity in the Council.

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