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EP pledges to tackle problem of double taxation in the Single Market

Date

02 Feb 2012

Sections

Euro & Finance

Today the European Parliament adopted Olle Schmidt's (Folkpartiet, Sweden) report on tax that responds to the tax initiatives taken by the Commission in 2011 and on the areas where much more must be done to increase growth and boost Europe's competitiveness. In particular, the report focuses on removing cross-border tax obstacles for EU citizens and businesses, on preventing tax fraud, increasing tax transparency, as well proposing common principles, general guidelines concerning taxation and the need for further tax coordination where the EU can play a key role.

"It is important that we address the tax problems people are facing in their everyday lives, notably those suffering from double taxation, or difficulties in obtaining allowances, tax reliefs or deductions from foreign tax authorities when they live in one EU Member State but they work and/or invest in another one.  An EU common policy in this sense could make the difference", added Mr Schmidt referring to the tax problems - addressed in the report - that EU citizens face in cross-border situations within the EU.

"I therefore welcome the Commission's recently adopted Communication on Double Taxation that announces concrete measures such as the creation of a European forum to develop a code of conduct on double taxation and a binding dispute settlement procedure for unresolved cases of double taxation," continued Mr Schmidt. In fact  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.

"Not least, it must not forget that tax evasion, fraud and lack of transparency cost the EU and its Member States billions of Euros in lost tax revenue each year," concluded Schmidt. Indeed, the report also calls on Member States to prioritise, among others, the fight against the use of tax havens for illicit purposes and on the EU institutions to establish an EU definition and list of tax havens or secrecy jurisdictions. 

Note to the editor:

Taxation is mostly a Member State and not an EU competence. Nevertheless, the financial and economic crisis and the most recent institutional progress seem to give taxation in the EU area a crucial role in macroeconomic terms, as well as for the correct functioning of the internal market. It is important that the European Parliament is able to express itself clearly on the matter as the EU Treaty foresees only simple consultation and unanimity vote in the Council.



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