Overview of Cross-Border Tax Law in the EU
There is no concrete EU law stating how people moving from one EU country to another should be taxed.
Pension Taxation Differences Among EU States
To name a specific example, taxation on pensions differs between different EU member states causing problems for people who have worked in one EU country, but retired in another one, and even in some cases leading to pensioners being taxed twice on their income.
The application by member states of their taxing rules in parallel is not in itself contrary to EU law even if this leads to double taxation.
Recent EU Efforts to Address Tax Obstacles
To explore how taxation issues can be addressed, the EU Commission has recently published a Communication report on cross-border tax obstacles for individuals.
Stakeholder Suggestions for Tax Solutions
Some suggestions addressed in this report by stakeholders about how cross-border tax problems could be tackled, include:
- Setting up central one-stop-shops in tax administrations where cross border workers and investors could seek reliable tax information, as well as directly pay taxes and receive all tax certificates;
- Having a better interaction between the different pension taxation regimes;
- Translating information into other EU official languages and making greater use of IT;
- Adopt special rules for frontier workers and cross-border workers that take account of the interaction of tax and social security systems in different member states.
Key Proposed Actions by the European Commission
Some of the European Commission’s proposed actions include:
- Handle complaints actively and ensure greater availability of information for citizens on the results of complaints about EU countries’ tax laws and infringement cases in the tax field;
- Provide easier access to the Commission’s Europe Direct advice services, and ensure that these services can better deal with tax related questions and that citizens can have direct access to help and advice;
- Solutions concerning the cross-border problems for EU citizens in the fields of passenger car taxation and concerning online purchases of goods and services;
- Assessing the state of play regarding the tax obstacles facing individuals who are active across borders within the EU and may come up with more concrete proposals for solutions when it has completed its examination;
- Examine possible solutions to double taxation problems that are not currently resolved by bilateral tax treaties.
