23 October 2001

Commission Communication Towards an Internal Market without Tax Obstacles

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The commission presented a commission comunication on company taxation in the Union. It believes that company taxation systems in the EU have failed to keep up with developments such as globalisation, economic integration in the Internal Market and Economic and Monetary Union. Economic modelling suggests that the differences in effective tax rates are attributable mainly to differences in national statutory tax rates rather than to differences in the size of the tax base. The commission has identified a number of tax obstacles to cross-border economic activity and plans a number of targeted measures as the extension of the Directives on dividends and mergers, cross border loss relief, transfer pricing, and double taxation conventions. Companies must in the longer term be allowed a consolidated corporate tax base for their EU wide activities to avoid the current costly inefficiencies of fifteen separate sets of tax rules.

See also the press release for a short summary.

© European Commission