The European Commission has launched a public consultation to collect factual examples of direct tax problems that arise when venture capital is invested across borders. Contributions are requested by 5 November, 2012.
Today the European Commission has launched a public consultation to collect factual examples of direct tax problems that arise when venture capital is invested across borders. Due to mismatches between the tax systems of the EU's 27 Member States, venture capital funds can face problems of double taxation as well as legal and administrative uncertainty when they invest across borders. These problems could hinder the full development of the venture capital market in Europe and therefore compromise the provision of financing to the EU's most innovative small and medium-sized enterprises (SMEs).
Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: "Venture capital is an essential source of financing for companies, in particular innovative start-up SMEs facing the costs of developing know-how. SMEs are the backbone of the EU's economy and help to generate economic growth and new jobs. It is therefore the collective responsibility of the Commission and Member States to find solutions to tax obstacles that hinder cross-border venture capital within the EU."
The aim of the public consultation is to find concrete examples of direct tax problems and to assess the impact of these problems in terms of additional costs to investors and SMEs in the EU. The Commission also seeks suggestions from respondents on feasible solutions to address any such problems. On this basis, the Commission will be able to decide if there is a need for EU-level solutions to remedy the problems and develop the most appropriate policy response by 2013. The Commission has invited all interested parties, including individual citizens, businesses and business organisations, tax administrations and tax professionals in academia, to provide their views on this matter by 5 November, 2012.
Press release
Public consultation
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