WRITTEN QUESTION E-0866/02

by Francis Decourrière (PPE-DE) to the Commission

(3 April 2002)

Subject: Passing on the family business French law

In March 1998 the European Commission issued a communication urging the governments of the Member States to favourably review their national rules on the passing on of family businesses, arguing that the law on business inheritance was damaging to employment in the European Community.

Introduction of the euro in January 2002 has highlighted distortion of competition arising from the legal and fiscal regulations affecting French family businesses.

In this area French law seems to be persisting in lagging behind the other Member States.

When presenting its priorities for the European Union's future fiscal policy, the Commission pointed out that it intended to give particular attention to the fiscal problems facing individuals and businesses operating in the internal market.

Will the Commission be setting up coordinated action to deal with the fiscal obstacles and loopholes in the area of business taxation, particularly on the passing on of family businesses? Does it intend to review best practice in the Member States following the introduction of the euro, as it did in 1997?

Answer given by Mr Liikanen on behalf of the Commission

(14 May 2002)

The Commission's action in the area of the transfer of businesses dates back to 1993 when it organised a symposium to find out the situation in the different Member States and to define best practice. The Commission has continued its work in this area over the years and in November 2000 it launched a project on the transfer of businesses within the framework of the Best Procedure of the Enterprise Directorate-General. An expert group was set up, as part of this Best Procedure project, to help the Commission monitor the Member States' implementation of the Commission Recommendation 94/1069/EC of 7 December 1994 on the transfer of small and medium-sized enterprises(1). The tasks of the group include identifying the legal measures including taxation, and support measures taken by the Member States since 1998 when the first review was made(2), assessing these measures and making proposals for further action. The role of the Commission continues to be that of a co-ordinator and a facilitator of exchanges of best practice between the Member States. It is the responsibility of the Member States to make the necessary changes in their legislation or to provide support for business transfers.

The expert group will submit a final report by June 2002. The first results of the group's work were already presented at the European Colloquium on the family enterprise which was organised by the Spanish Presidency on 24 February 2002. They are in the form of a summary table that indicates which areas of the Recommendation each Member State has implemented. The table can be found on the following website: http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/transfer_business/index.htm.

The best project will end at the European Seminar on the Transfer of Businesses in Vienna, Austria which takes place from 23 to 24 September 2002 (www.transferofbusinesses.at). At this seminar, the final report of the expert group and good practice cases in this area will be presented.

The Commission will continue working on the transfer of businesses after the seminar. The next steps will be to help the Member States to measure or benchmark their own performance and to learn about concrete solutions in order to make progress in this area and also to respond to the proposals put forward by the expert group.

Furthermore, the work on fiscal obstacles and loopholes in the area of business taxation will indeed remain a priority for the Commission, as indicated in the Commission's Communication of May 2001 on the priorities for the years ahead(3) and the subsequent Communication of October 2001 Towards an Internal Market without tax obstacles(4). However, it should be noted that this work will focus on issues with an Internal Market component. Insofar as problems concerning the transfer of family businesses arise in a national context, they will be dealt with in the process described above.

(1) OJ L 385, 31.12.1994.

(2) Commission Communication on the transfer of small and medium-sized enterprises, OJ C 93, 28.3.1998.

(3) OJ C 284, 10.10.2001.

(4) COM(2001) 214 final.