WRITTEN QUESTION No. 2047/98 by Jean-Claude PASTY Tax harmonization in the EU Member States
Date: 1998-07-07
Institutions: European Parliament, PASTY
Subjects: France, Luxembourg, action brought before an administrative court, appeal to the Court (EU), double taxation, residence, right of establishment, tax authorities, tax harmonisation, tax on income













EUR-Lex - 91998E2047 - EN






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91998E2047

WRITTEN QUESTION No. 2047/98 by Jean-Claude PASTY Tax harmonization in the EU Member States  


Official Journal C 289 , 11/10/1999 P. 0001 





WRITTEN QUESTION E-2047/98by Jean-Claude Pasty (UPE) to the Commission(7 July 1998)Subject: Tax harmonization in the EU Member StatesA French citizen legally resident and self-employed in an EU Member States (e.g. the Grand-Duchy of Luxembourg) is officially recognized by the country's inland revenue authorities as a resident for tax purposes and is taxed on that basis.The French authorities also consider him to be a resident for tax purposes and demand that he pay personal income tax in France.Can the commission answer the following:1. What administrative procedure can this taxpayer follow to avoid double taxation?2. What legal channels would be open to him to claim his rights should one of the states concerned challenge the justification for the double taxation, to quote the terms of Article 24 of the Franco-Luxembourg tax convention of 1 April 1958, and refuse to open the amicable procedure under that article?Answer given by Mr Monti on behalf of the Commission(5 October 1998)Most cases of double taxation affecting taxpayers in the Community are currently settled under existing tax conventions between Member States to prevent double taxation. The convention between France and the Grand-Duchy of Luxembourg, like almost all such conventions, provides for taxpayers facing double taxation to send a simple request to either the authorities of his country of residence for tax purposes or those of the other country, so that they may agree on a fair way of avoiding double taxation under Article 24 of the convention. This essentially ex gratia procedure does not place the tax administrations under any obligation to stop the applicant having to pay taxes twice.This means that in the case raised by the Honourable Member, the person facing double taxation has no right under the terms of the convention to demand that the tax administrations concerned begin amicable proceedings to settle the matter. There is the option (within the legal time limits) of taking the matter to the relevant courts in the two Member States so as to obtain a settlement of the tax situation if there are any problems in applying or interpreting the bilateral tax convention. Undoubtedly, taking the case to court may seem difficult and expensive to the taxpayer, and may not guarantee a settlement within a reasonable time span. Naturally, in such cases the judges in the national courts are required to see that the rights conferred on Community citizens by the EC Treaty are effectively protected. They are at liberty to request a ruling from the Court of Justice, under Article 177 of the EC Treaty, about the provisions made to ensure effective protection of and respect for the fundamental rights of persons who have exercised their right to freedom of establishment under the EC Treaty, including the implications for the application or interpretation of a tax convention to prevent double taxation concluded between two Member States.