The European Commission expert group has published two separate reports containing its conclusions on the cross-border tax problems affecting individuals in the EU. One report deals with income, savings and investments, and recommends a one-stop-shop approach to resolving double taxation issues. The other deals with inheritance taxes, and recommends a change in EU law to adopt a ‘one succession, one tax’ approach, based on habitual residence.
The expert group was formed in 2014 to identify and find practical ways of removing the tax problems faced by individuals who move from one EU country to another.
The first report, Ways to tackle cross-border tax obstacles facing individuals within the EU, highlights the need for better rules on relieving double taxation and the administrative difficulties associated with reclaiming the taxes withheld, particularly those faced by highly mobile workers such as performing artists and sportspersons. It also notes the absence of specialised cross-border tax expertise in local tax offices.
The second report, Ways to tackle inheritance cross-border tax obstacles facing individuals within the EU, suggests that the multiple taxation of estates which leave property situated in two or more EU member states can, as things stand, ‘amount to expropriation’. It notes the group’s view that action at EU level is now ‘essential’.
The main recommendation is for a change to EU law allowing for ‘one succession, one tax’, i.e. one IHT system to be applicable to one inheritance. The applicable tax system should be determined by reference to the ‘habitual residence’ of the deceased, a concept already used in the social security context.
The group does not regard an expansion of the number of double taxation conventions covering inheritance tax as a practicable solution to the problem, given the number of bilateral treaties this would require.
The European Commission’s 2011 recommendation on relief for double taxation of inheritances has not led to significant change among member states. See http://bit.ly/1hvQgZg.
The European Commission expert group has published two separate reports containing its conclusions on the cross-border tax problems affecting individuals in the EU. One report deals with income, savings and investments, and recommends a one-stop-shop approach to resolving double taxation issues. The other deals with inheritance taxes, and recommends a change in EU law to adopt a ‘one succession, one tax’ approach, based on habitual residence.
The expert group was formed in 2014 to identify and find practical ways of removing the tax problems faced by individuals who move from one EU country to another.
The first report, Ways to tackle cross-border tax obstacles facing individuals within the EU, highlights the need for better rules on relieving double taxation and the administrative difficulties associated with reclaiming the taxes withheld, particularly those faced by highly mobile workers such as performing artists and sportspersons. It also notes the absence of specialised cross-border tax expertise in local tax offices.
The second report, Ways to tackle inheritance cross-border tax obstacles facing individuals within the EU, suggests that the multiple taxation of estates which leave property situated in two or more EU member states can, as things stand, ‘amount to expropriation’. It notes the group’s view that action at EU level is now ‘essential’.
The main recommendation is for a change to EU law allowing for ‘one succession, one tax’, i.e. one IHT system to be applicable to one inheritance. The applicable tax system should be determined by reference to the ‘habitual residence’ of the deceased, a concept already used in the social security context.
The group does not regard an expansion of the number of double taxation conventions covering inheritance tax as a practicable solution to the problem, given the number of bilateral treaties this would require.
The European Commission’s 2011 recommendation on relief for double taxation of inheritances has not led to significant change among member states. See http://bit.ly/1hvQgZg.
