Bolkestein plans to reduce tax red-tape

Date: 23/10/03

FRITS Bolkestein, the internal market commissioner, has unveiled draft rules that would cut taxation red-tape when companies merge, split up or move their head office.
The Dutchman said the directive, which updates an old law, is "an important element of our strategy to remove all forms of double taxation currently encountered by companies exercising their freedom to operate across borders within the internal market".
He said it would boost business efficiency and nudge the Union closer to its ambitious goal of being the most competitive economy by the end of the decade.
A key part of the directive, which requires unanimous approval by member states, is a widening of the definition of firms that qualify for a less burdensome tax regime. For example, the recently adopted European Company and European Cooperative Society would be included - making it easier for businesses operating in more than one member state to set themselves up as a "single entity". At the same time, the directive would remove the risk of double taxation when companies transfer their registered office from one EU country to another. Firms deciding to convert their foreign branch into a subsidiary would also be able to defer tax on the transaction.
The exchange of financial assets, such as shares, during mergers would be taxed in the same way across the EU.

http://ec.europa.eu/comm/taxation_customs/proposals/taxation/tax_prop.htm http://ec.europa.eu/comm/taxation_customs/proposals/taxation/tax_prop.htm

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