Source: EURLEX
Language: en
Format: md

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# 92003E0642

**WRITTEN QUESTION E-0642/03 by Paul Rübig (PPE-DE) to the Council. Tax treatment of research spending.** 
  
*Official Journal 280 E , 21/11/2003 P. 0076 - 0077*

  

WRITTEN QUESTION E-0642/03

by Paul Rübig (PPE-DE) to the Council

(4 March 2003)

Subject: Tax treatment of research spending

The Lisbon process stresses that technology-based firms are expected to provide a positive impetus, particularly as regards the creation of new jobs. It is also explicitly pointed out that Europe has some way to go to catch up with Japan and the USA in the area of research.

How are research spending and operational investment treated for tax purposes in the current and future EU Member States and in the USA, Japan and Australia?

What impact does taxation have on the credit-worthiness of SMEs and research bodies?

How does the Council assess these factors? Will it draw on them in its preparatory work on the implementation of Basel II in the EU?

Reply

(21 July 2003)

The Council shares the importance that the Honourable Member attaches to the Lisbon process and the role of SMEs and technology based firms.

In this context, the attention of the Honourable Member is drawn to the report by the Council (Competitiveness) of 3 March 2003 to the Spring European Council, which, amongst other things, states that:

Systematic and comprehensive impact assessment of proposed Community legislation, as well as consultation of business and all other interested parties, must be carried out by the Commission and, subsequently, taken into account at the decision-making level, to ensure that a balanced approach is maintained in the EU framework and that European enterprises remain competitive and operate on a level playing field in the global economy;

A coordinated approach to entrepreneurship policy, providing a comprehensive response to the needs of entrepreneurs, such as eliminating barriers to business creation, development and growth and balancing the risks and rewards, is required;

Effective involvement and consultation of small businesses in the policy-making process must be ensured.

As to the tax treatment of research spending in current and future Member States, as well as the impact of taxation on the credit worthiness of SMEs and research bodies, the Council does not have the necessary information to respond to the questions put by the Honourable Member. The Council invites the Honourable Parliamentarian to address directly the Member states, the acceding states and other third countries in this regard.

Concerning the new capital adequacy framework (Basel II) being negotiated in the framework of the Basel Committee with a view to replacing the 1988 Basel accord, the Council is aware of the potential implications for the SME sector. In the negotiating process and the preparatory work done in this respect, every effort will be made to ensure that Basel II should have no negative effects on SME lending. In this respect, however, the Honourable Member is advised to refer the question to the Commission which has observer status in the negotiations.

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