EU clamps down on 'lax' tax regimes
The European Union has announced plans to clamp down on special tax regimes affecting financial services in 11 member states.
EU competition commissioner Mario Monti claimed the tax regimes were ‘probably so lax’, they constituted illegal state aid payments that could unfairly favour local companies.
In a speech to the European Parliament’s economic and monetary affairs committee this week, Monti said that in four cases, the commission had alreadyconcluded that particular regimes could not be justified and has askedmember states to end such ‘tax breaks’.
These include:
- Belgium – fiscal regime of co-ordination centers;
- Greece – fiscal regime for offices of foreign companies;
- Italy – tax incentives linked to the Trieste Financial Services andInsurance Centre;
- Sweden – foreign insurance companies taxation regime.
The commissioner announced that Brussels had also launched formalinvestigations into other special tax regimes affecting financial services,which could lead to a similar demand for them to be dismantled by nationalgovernments.
Monti emphasised that the investigations did ‘not challenge legitimate lower tax rates as such but rather harmful regimes that distorted competition.’
Systems under the spotlight included:
- Britain – Gibraltar qualifying offshore companies rules and Gibraltarexempt offshore companies rules;
- Germany – special fiscal regime for control and co-ordination centres offoreign companies;
- Spain – special fiscal regime for Bizkaia co-ordination centres;
- France – the headquarters and logistics centres regime and the R‚gime desCentrales de Tr‚sorerie;
- Ireland – tax exemption on foreign income;
- Luxembourg – the co-ordination centres regime and the finance companiesregime;
- Netherlands – special fiscal regime for international financing activities;
- Finland – land Island Captive Insurance Regime.
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