EU warns of legislation on tax co-ordination

Laszlo Kovacs, the EU commissioner for tax, has told member states that vast
improvements are required to protect citizens and businesses from cross-border
tax discrimination.

Kovacs said that if necessary he would introduce legislation to ensure that
the coordination of tax policy was better coordinated between the EU’s 25 member
states, the FT
reports.

‘If such co-operation does not work then we would try with some legally
binding solution,’ Kovacs was quoted as saying.

The warning comes in the wake of a growing number of legal challenges to tax
policy in member states. Issues that have emerged from the
M&S
case on group loss relief that went before the
European Court of Justice
could be dealt with by such legislation.

Kovacs has also set out papers coordinating exit taxes, and is planning
similar documents for inheritance tax, withholding tax and anti-avoidance.

The commissioner believes these papers are necessary to untangle Europe’s tax
system, which hurts individuals and deters companies from exploiting the single
market economies of scale.

Further reading:

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Treasury steels itself for massive hit from ECJ

Treasury faces tax rewrite as challenges mount