The Commission wants to gather views on the double non-taxation of cross-border companies

The European Commission has launched a public consultation in order to know how to tackle double taxation. According to the Commission, the aim of the consultation is to gauge the full scale of the problem and see where the main weaknesses lie. The main problem lies to the fact that double non-taxation deprives Member States of significant revenues and creates unfair competition between businesses in the Single Market.

The European Commission has opened to views a public consultation on the double non-taxation of cross-border companies. The consultation aims to gauge the full scale of the problem and see where the main weaknesses lie. On this basis, the Commission will develop the most appropriate policy response before the end of 2012. It will run until 30 of May 2012.

The consultation concerns direct taxes such as corporate income taxes, non-resident income taxes, capital gains taxes, withholding taxes, inheritance taxes and gift taxes. It covers cross-border double non-taxation of companies i.e. cases where divergent national rules and/or inadequate national tax measures in two countries lead to non-taxation. For example, this may be the case if two countries define entities in a different way, resulting in income not being taxed in either state.

The Commission acknowledged that Member States have to consider revenue-raising measures in the Annual Growth Survey 2012. Better tax coordination at the EU-level has a role to play in this context. The Commission set out in the Communication on Double Taxation in the Single Market adopted in November 2011 that in a period when Member States are looking for secure and additional tax revenues, it is important for their credibility towards their taxpayers that they take the necessary measures to remove double taxation and double non-taxation.