WRITTEN QUESTION E-3819/00 by Robert Goebbels (PSE) to the Commission. French tax law restricting Community insurers' freedom to provide services.
Date: 2000-12-07
Institutions: European Parliament, Provisional data
Subjects: France, freedom to provide services, infringement procedure (EU), investment income, life assurance, restriction on competition, tax law, tax system, taxable income

13.11.2001

EN

Official Journal of the European Communities

C 318 E/11

Finally, it is important to underline that the level of export aid is calculated with great care and limited to
what is strictly necessary. During the last year the refund rates were reduced to two thirds of the level
applicable in 1999. Was it not for recent serious developments in the beef sector that cut could even have
been greater.

(1) OJ C 174 E, 19.6.2001, p. 137.
(2) OJ L 82, 19.3.1998.
(3) OJ L 340, 11.12.1991.

(2001/C 318 E/012)

WRITTEN QUESTION E-3819/00

by Robert Goebbels (PSE) to the Commission

(7 December 2000)

Subject: French tax law restricting Community insurers(cid:146) freedom to provide services

The French legislator has adopted what may be described as discriminatory tax rates in the case of
redemption of a life assurance policy by French residents wishing to benefit
from the freedom of
Community insurers to provide services.

The effect of Articles 125 OA as amended (Article 21 of the French 1998 finance act) and 125 A of the
French general code of taxation is to exclude policy holders who have taken out a policy under the
freedom to provide services from the benefit of the (cid:145)prØlŁvement libØratoire(cid:146) (release tax) rates. The rate is
35 % for a contract period of less than four years, 15 % for a contract period of between four and eight
years, and 7,5 % for a contract period of eight or more years, with the stipulation that policies must have
been taken out by 26 September 1997 or premiums paid after that date.

French residents who have taken out their life assurance policy under the freedom to provide services
cannot benefit from these rates. The profit they realise when redeeming their policy is subject to taxation
under the sliding scale for income tax, the highest rate of which is 54 %. So taxpayers subject to the
maximum rate of income tax who redeem their life-assurance policy after eight years will pay 7,5 % tax if
they have taken out their policy with an insurer established in France, by opting for the release tax, but
54 % tax if they take out a policy under the freedom to provide services.

This blatant discrimination, to which a number of financial journals and magazines have drawn attention,
severely handicaps the activities of foreign insurers operating in the French market under the freedom to
provide services, and has led to the lodging of complaints with the Commission. In response to the
complaints the Directorate-General for Taxation and Customs Services expressed its intention of proposing
that the Commission institute proceedings against France under Article 226 of the EC Treaty on the subject
of these discriminatory tax rates. However, more than a year after the first complaints reached the
Commission it has still not responded.

Could the Commission say what action it intends to take on this matter?

Answer given by Mr Bolkestein on behalf of the Commission

(12 February 2001)

French legislation has been found to exclude income from the release tax rate under Articles 125(A) and
125(0A) of the French general code of taxation which is subject to income tax if the payer is not resident
or based in France. Income from such investments or policies taken out with companies or individuals
based outside France is always subject to the aggregation of taxable income and, as a result, to a rate of
taxation which is generally higher, or in any case can be higher. The legislation therefore appears to give
rise to discrimination against services from finance and insurance companies based outside France.

C 318 E/12

Official Journal of the European Communities

EN

13.11.2001

The Commission wrote to the French authorities on 30 October 2000, asking them to send their
comments within two months of receiving the letter. After studying any comments, the Commission
reserves the right to deliver the reasoned opinion referred to in Article 226 (formerly Article 169) of the
EC Treaty.

It should be stressed that the complaints received in this connection contained a number of points which
necessitated meetings with the complainants and requests for further information from the French
authorities. The complainants were informed of the Commission(cid:146)s views.

(2001/C 318 E/013)

WRITTEN QUESTION E-3836/00

by Daniela Raschhofer (NI) to the Commission

(7 December 2000)

Subject: Repayment of farm subsidies

On Wednesday, 5 July 2000, the Commission announced that Austria would have to repay € 800 000 in
farm subsidies because of the lack of penalties for inadequate tagging of male bovines in 1996. According
to the Commission, Austria(cid:146)s agricultural market was negligent in the checks performed. Only 40 % of the
ear-tags issued were entered in the database.

In reply to Question E-2636/00,
adjustments for a large number of Member States. Please state details.

the Commission stated that

it had decided numerous different

What amounts were the other European Union Member States required to repay and why?

Answer given by Mr Fischler on behalf of the Commission

(9 February 2001)

The information requested by the Honourable Member can be found in Commission Decision 2000/449/
EC of 5 July 2000 excluding from Community financing certain expenditure incurred by the Member
the European Agricultural Guidance and Guarantee Fund
States under
(EAGGF) (1). The Annex to that Decision specifies the amounts involved and the reasons for the financial
corrections imposed on the Member States.

the Guarantee Section of

(1) OJ L 180, 19.7.2000.

(2001/C 318 E/014)

WRITTEN QUESTION E-3870/00

by Avril Doyle (PPE-DE) to the Commission

(8 December 2000)

Subject: European Union funding in Honduras

Given that the international community(cid:146)s response to the Hurricane Mitch disaster two years ago in
Honduras has been acknowledged as being well organised and is achieving its aim of rebuilding Honduras,
would the Commission please explain promptly why the EU has not delivered on its promises to allocate
several billion euros to Honduras and why, two years later, not a single euro has been transferred to that
country?