European Commission tackling double non-taxation

The consultation concerns direct taxes such as corporate income taxes, non-resident income taxes, capital gains taxes, withholding taxes

Double non-taxation deprives Member States of significant revenues and creates unfair competition between businesses in the Single Market. It occurs when cross-border companies escape paying taxes due to mismatches between national tax systems. Aggressive tax planners often focus on exploiting loopholes between Member States’ systems specifically to avoid taxes.

As a first step in combating this problem, the Commission has launched 29 February 2012 a public consultation on the double non-taxation of cross-border companies.

The aim of the consultation is 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. In order to encourage participation by those who may have insight into real-life exploitation of double non-taxation by companies, anonymous contributions will be accepted.

The consultation is available in all official EU languages and will run until May 30 2012.