The European Commission (EC) has adopted a communication that highlights where the main double taxation problems lie within the European Union (EU), and outlines concrete measures the EC will take to address them.
A public consultation carried out by the commission found more than 20% of reported cases of double taxation of businesses were worth over €1 million, while more than 35% of cases concerning individuals were worth in excess of €100 000.
Over the past year, the EC has tackled double taxation in specific areas, such as by making the proposal for a common consolidated corporate tax base.
As a first step to strengthen existing legislation against double taxation, the commission has adopted a simultaneous proposal to improve the interest and royalties directive.
It aims to reduce the instances of one member state levying a withholding tax on a payment while another member state taxes the same payment.
Other areas in which the EC intends to propose specific solutions to double taxation problems include cross-border inheritance tax and dividends paid to portfolio investors.
The commission will launch a consultation to gauge the full scale of the problem of double non-taxation. It will use the results to determine the most appropriate and effective measures to prevent double non-taxation and come forward with solutions next year.
