The European Commission has published on 20 December a Communication outlining the most serious tax problems that EU citizens face in cross-border situations and has announces plans for solutions. This Communication also puts forward that some measures should be implemented in order to make national tax systems more compatible so that citizens will not be deterred from engaging in cross-border activities.

EU citizens moving to, working or investing abroad, are quite often faced to problems such as double taxation or other difficulties which sometimes act as a deterrent for their activities and investments in foreign countries. In fact, this problem within the Union causes half of the of the tax infringement proceedings the Commission opens every year in the tax area.

Aiming to solve this situation and avoid these infringement proceedings, the European Commission has highlighted the need for Member states to design and implement their tax measures and practices in a way which does not deter citizens from engaging in cross-border activities. Commission's Communication on Removing cross-border tax obstacles for EU citizens, it also establishes that Member states must also coordinate more closely with each other in order to prevent mismatched tax rules from creating obstacles and barriers to the Internal Market.

The Commission intends to step up its activities to help make Member States' tax systems more compatible, and to propose concrete measures to prevent or remove tax problems for EU citizens.

Measures proposed by the Commission to eliminate cross-border tax barriers

• A Communication on Double Taxation in 2011, examining the extent and gravity of this problem across the EU, followed by legislative proposals in 2012, proposing solutions.
• Proposals in mid-2011 to address cross-border inheritance tax problems.
• Measures to resolve the double taxation that can arise when a car that is first registered in one Member State is then moved to and re-registered in another Member State.
• Extension of a "one-stop-shop" system for e-Commerce, in order to make reporting obligations for businesses much simpler and easier for them to offer goods and services online to foreign consumers. Obstacles to e-Commerce will also be addressed within the review of the EU's VAT System for which a consultation is now open.
• Proposals in 2012 to solve problems related to the taxation of cross-border dividend payments.

In addition, the Commission intends to promote a wide dialogue amongst national authorities and stakeholders to see what else could be done to simplify tax measures to the benefit of citizens and the Internal Market. Ideas include standardised tax claim and declaration forms throughout the EU, single info-points where workers and investors could get clear and reliable tax information, and special tax measures at national level to cater for the needs of mobile and border workers.