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The European Commission has proposed a comprehensive strategy to address the tax obstacles that act as a disincentive to individuals wishing to contribute to pension schemes outside their home Member State and pension institutions that wish to provide pensions across borders.
The European Commission has proposed a comprehensive strategy to address the tax obstacles that act as a disincentive to individuals wishing to contribute to pension schemes outside their home Member State and pension institutions that wish to provide pensions across borders.
In its publication on the topic, the Commission first sets out its views on how the European Community Treaty rules on the free movement of capital, labour and services apply in the area of cross-border pension provision. The main conclusion is that Member States are required by the Treaty to eliminate discrimination against occupational schemes established in other Member States. The Commission intends to examine the relevant national rules and take the necessary steps to ensure their compliance with the fundamental freedoms of the Treaty, including, where necessary, bringing cases before the Court of Justice.
The Commission also recommends that Member States agree on automatic exchange of information on supplementary pensions. This would meet Member States' concerns about enforcement of taxes in the case of cross-border pension provision. A Community legislative framework for information exchange already exists (in particular, the Mutual Assistance in Tax Matters Directive -77/799). Finally the Commission addresses the problems of double taxation and non-taxation arising from the mismatch of tax systems. Different Member States have different rules in terms of whether they tax or exempt pension contributions, investment income and capital gains of the pension institution, and pension benefits. However, it acknowledges that completely uniform rules for supplementary pensions will not be easy to achieve while the relative reliance on statutory social security and occupational pension schemes varies so significantly from one Member State to another. The Commission therefore also explores how double taxation and double non-taxation problems can be addressed in the short term by better co-ordination of Member States' taxation rules. Solutions could include unilateral tax relief, bilateral solutions or a multilateral convention or co-ordinating measures at European Union level.
The full text of the communication on the elimination of tax obstacles to the cross-border provision of occupational pensions is available on www.europa.eu.int/comm/taxation_customs/whatsnew.htm.
Acceptance in lieu scheme
Paintings by Stubbs and Raeburn are among items which have been received under the acceptance in lieu scheme in the year 2000-01. Overall, the amount of tax settled by the scheme for the year was just over £16 million, the second highest amount of tax settled this way since the inception of the scheme.
(Source: Department of Culture, Media and Sport press release dated 2 May 2001.)
