WRITTEN QUESTION E-3449/00 by François Bayrou (PPE-DE) to the Commission. Double taxation.
Date: 2000-11-07
Institutions: European Parliament, Provisional data
Subjects: France, Luxembourg, double taxation, free movement of persons, tax convention, tax on income

C 163 E/122

Official Journal of the European Communities

EN

6.6.2001

(2001/C 163 E/137)

WRITTEN QUESTION E-3449/00

by Fran(cid:231)ois Bayrou (PPE-DE) to the Commission

(7 November 2000)

Subject: Double taxation

The mobility of European citizens, promoted by the policy pursued by the European Commission, is being
impeded by the persistent problems of double taxation.

Despite the large number of taxation agreements concluded between the various countries concerned, the
instances of a refusal
to apply the gentleman(cid:146)s agreement procedure introduced by such taxation
agreements is becoming increasingly frequent. Apparently, a taxation agreement of this nature exists
between France and Luxembourg, but it is rarely implemented by the two national authorities concerned.
Since there is no arbitration body able to adjudicate on tax disputes, such disputes can drag on for decades.

What does the European Commission intend to do to ensure that the tax authorities apply the agreements
currently in force which were drawn up in the interests of European citizens and in order to encourage
their mobility?

Answer given by Mr Bolkestein on behalf of the Commission

(11 December 2000)

The Commission fully agrees with the Honourable Member that double taxation can constitute an obstacle
to the mobility of European citizens. The issue of double taxation is recognised by the EC Treaty.
Article 293 (ex 220) of the EC Treaty stipulates that Member States shall, so far as is necessary, enter
into negotiations with each other with a view to securing for the benefits of their nationals the abolition of
double taxation within the Community. In accordance with Article 293, Member States have concluded
bilateral
tax conventions with each other and there is at present a near complete network of tax
conventions within the Community.

Bilateral tax conventions generally provide for a mutual agreement procedure for resolving difficulties
arising out of the application of the convention. In accordance with Article 25 of the Organisation for
economic cooperation and development (OECD) Model Tax Convention on Income and on Capital, such
mutual agreement procedures usually provide that the competent authorities shall endeavour by mutual
agreement to resolve the situation of taxpayers subjected to taxation not in accordance with the provisions
of the convention. In addition, they invite and authorise the competent authorities to resolve by mutual
agreement problems relating to the interpretation or application of the convention and, furthermore, to
consult together for the elimination of double taxation in cases not provided for in the convention.
Although the competent authorities are usually able to resolve disputes by mutual agreement within a
reasonable period of time, there are examples of mutual agreement procedures which continue for a long
period of time or do not result in a satisfactory outcome. The Commission believes that binding arbitration
can play an important role in resolving such disputes and in speeding up proceedings and that a provision
providing for such binding arbitration would therefore be a useful addition to Member States(cid:146) bilateral tax
treaties.

It may be noted that there already exists an instrument which provides for arbitration for tax disputes in
the area of transfer pricing: the Arbitration Convention (1). The objective of this multilateral convention,
which entered into force on 1 January 1995, is to establish a procedure to resolve cases of double taxation
between enterprises of different Member States resulting from an upwards adjustment of profits of an
enterprise in one Member State which is not matched by a corresponding downward adjustment of the
profits of an associated enterprise in another Member State. Bilateral tax conventions generally include
provisions for corresponding adjustments to prevent problems of double taxation but do not impose any
binding obligation in this regard. The Arbitration Convention includes provision for the appointment of an
advisory committee to give an opinion on the elimination of the double taxation if the two Member States
involved cannot reach agreement on how this should be achieved within two years of the submission of a
complaint by the firms involved. The opinion of the advisory committee is binding on the Member States,
unless they reach agreement on a decision which deviates from the opinion. The decision which will
eliminate the double taxation has to be taken within six months of the opinion of the advisory committee.
The Commission is currently examining the functioning of the Arbitration Convention in the context of
the study on company taxation which will be presented in 2001.

6.6.2001

EN

Official Journal of the European Communities

C 163 E/123

An interesting development worth mentioning is the new double taxation convention between Austria and
Germany which has been signed but not yet ratified. This convention provides that when the competent
authorities are not able to resolve difficulties or doubts concerning the interpretation or application of the
convention within a period of two years; they shall, at the request of the taxpayer, bring the case before
the Court of Justice in accordance with Article 239 (ex 182) of the EC Treaty. The Commission has noted
this development with interest and encourages other Member States to consider taking similar steps.

(1) Convention 90/463/EEC of 23 July 1990 on the elimination of double taxation in connection with the adjustment

of profits of associated companies (OJ L 225, 20.8.1990).

(2001/C 163 E/138)

WRITTEN QUESTION E-3451/00

by Nicole Thomas-Mauro (UEN) to the Commission

(7 November 2000)

Subject: Non-commercial transport of pets

The Weil report (for the High-Level Group on the Free Movement of Persons) noted a large number of
persistent barriers to free movement.

Out of a total population of 370 million, there are, currently, 5,5 million Community citizens (or 1,5 %)
established in the territory of a Member State other than their country of origin. They therefore constitute
a small number of citizens, but their impact on the Union is very important.

The Commission has been complaining about the difficulties it had in recruiting sufficient staff to manage,
for example, the LIFE Programme.

Every year, a large number of pets are abandoned in various countries.

The Commission:

1. Does it really believe that the proposal for a regulation on the health checks applicable to the non-

commercial transport of pets was necessary?

2. How many people will be affected by this regulation? Has the Commission calculated how many

animals are covered by this legislation?

3. What criteria did the Commission apply as regards efficiency and legislative priority?

4. What measures may a country take in the event of serious health risks?

Answer given Mr Byrne on behalf of the Commission

(8 December 2000)

1.
The Commission felt there was a need for Community health rules applicable to movements of pet
animals. The aim of the document is to achieve harmonisation (1), based on the rules in force in the
Member States, with the intention of removing national peculiarities which are unjustified and incompre-
hensible to European citizens.

2.
The provisions of the draft concern both citizens resident outside their Member State of origin and
all those who travel or holiday outside their Member State of residence accompanied by their cat or dog.
In other words, tens of millions of European citizens are concerned by this proposal for harmonisation.