The European Commission approved a Communication which highlights where the main double taxation problems lie within the EU, and outlines concrete measures that the Commission will take to address them. The objectives is remove one of the biggest tax obstacles to the Internal Market according to the Taxation Commissioner, Mr. Šemeta.

The Communication on Double Taxation approved by the European Commission seeks to tackle double taxation in order to make a more competitive economy and make the EU easier to invest and do business in. Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-Fraud and Audit underlined that with the Communication the Commission send a clear message to all citizens, businesses and trading partners: the EU does not tax twice!. The Communication highlights where the main double taxation problems lie within the EU, and outlines concrete measures that the Commission will take to address them. In addition, the Commission will also work to eliminate cross-border double taxation, with possibilities such as creating an EU Forum to develop a code of conduct on double taxation and a binding dispute resolution procedure for unresolved double taxation cases.

Currently there is nothing to oblige Member States to prevent non-discriminatory double taxation. Although Member States try to relieve double taxation through measures such as bilateral and multilateral double taxation conventions, these do not provide adequate protection for citizens and businesses due to various shortcomings (e.g. too narrow scope, lack of uniformity amongst Member States' provisions, administrative burdens, long time-lines for dispute resolution etc.). The 2010 Citizenship report highlights the inadequacy of existing mechanisms to avoid double taxation in the EU and 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. Additionally, the Commission issued another Communication in December 2010 in which identified these problems.

The Commission also adopted a proposal to improve the Interest and Royalties Directive, as an immediate first step to strengthen existing legislation against double taxation. This aims to reduce the instances of one Member State levying a with holding tax on a payment, while another Member State taxes the same payment. Other areas in which the Commission intends to propose specific solutions to double taxation problems include cross-border inheritance tax in the near future and dividends paid to portfolio investors later on.