Šemeta seeks to eliminate double taxation

Commission seeks to outline ways of bringing more compatibility to member states’ tax systems.

The European Commission is on Monday (20 December) expected to outline ways of bringing more compatibility to member states’ tax systems.

Algirdas Šemeta, the European commissioner for taxation, wants to remove the problems that people face when they move between member states. A Commission paper will set out proposals to eliminate the obstacles that arise from double taxation of income and capital, inheritance-tax rules, taxation of dividends paid across borders, vehicle registration and circulation taxes, and e-commerce.

Officials recognise that problems of this sort are preventing people from fully taking advantage of the internal market. They constantly receive complaints about complicated foreign tax rules and contradictory information provided by national authorities.

Cross-border movement

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The Commission is also concerned about the number of tax laws that discriminate against people moving to a new member state. Officials point to unfair rules relating to cross-border income, foreign properties, pensions, dividends and imports of cars, alcohol and tobacco.

Šemeta is expected to indicate that the Commission is determined to impose deadlines on member states to bring their tax legislation into line with EU law.

Top of the commissioner’s list is double taxation, which he believes needs a more comprehensive solution than existing bilateral tax treaties can provide. The Commission has already started a study of the problems people and companies face when their income and capital gains are taxed by more than one member state.

Šemeta is also expected to announce proposals on cross-border inheritance tax in mid-2011, including guidelines on eliminating laws on inheritance tax that discriminate against people moving between member states.

The Commission will also tackle what it sees as excessive red tape and double-taxation problems that arise when people buy cars in a member state other than their own, or move to another member state and have to register their vehicle there.

The problems related to tax in the context of e-commerce are also under study, in light of evidence that these discourage many retailers from selling to customers in another country.