The European Commission has launched a public consultation to gather factual elements regarding tax problems arising arise in cross-border venture capital investments. Further to real cases of problems produced in these situations, the Commission also seeks to identify their causes, which Member States are concerned, as well as their economic cost both for investors and member states.

Investors in venture capital funds operating in different Member States often face double taxation barriers caused by different tax systems in place in each of the 27 Member States. These differences may lead to a barrier to the proper functioning of the internal market for this type of investments, jeopardizing the financing of innovative SMEs with high growth potential.

In order to address these problems, the European Commission has launched a public consultation on tax issues linked to cross-border venture capital investment. It aims at knowing about real situations where double taxation has occurred or any other difficulties related to these kind of instruments. Commission's services invite all stakeholders – individual citizens, businesses, Member States, tax administrations, intergovernmental, non-governmental and business organisations, tax practitioners and academia, to take part in the consultation and to provide their views on this matter.

This consultation comes within the framework of the actions set forth by the Commission an aimed at examining the obstacles which hinder SMEs access to financing, especially in regard to taxation aspects of cross-border investments. The results of the consultation will provide elements to assess the magnitude of the problem and decide whether an initiative at EU-level is required to provide solutions. Interested parties may provide their views in response to the public consultation until November 5.