Brussels, 17/02/2011 (Agence Europe) - on Wednesday, 16 February, the European Commission sent a series of recent opinions to different member states, requesting them to change their tax legislation. If there is no response from these member states over the next two months, the Commission could take them to the European Court of Justice.
The United Kingdom is accused of operating two different discriminatory tax regimes: the first infringement relates to the UK's “transfer of assets abroad” legislation. If a UK resident individual invests in a company by transferring assets to it, and if this company is incorporated and managed in another member state, then the investor is subject to tax on the income generated by the company to which he/she contributed the assets. However, if the same individual invested the same assets in a UK company, only the company itself would be liable for tax. Under this legislation, if a UK-resident company acquires more than a 10% share of a company in another member state, and the latter company realises capital gains from the sale of an asset, the gains are immediately attributed to the UK company, which becomes liable for corporation tax on these capital gains. If, on the other hand, the UK company had invested in another UK resident company, only the latter would be taxable on its capital gains. In Belgium, the Brussels-Capital region provides for a reduced rate applicable to taxation of gifts of real estate in the Brussels Capital Region because to qualify the person has to live in Brussels for at least five years. The Commission considers such provisions to be incompatible with the freedom of residence, the free movement of workers and the right of establishment as provided for by the Treaty. In France, French tax provisions allow accelerated depreciation to be applied to new residential property in France, which is intended for letting for a minimum of 9 years. By contrast, a French taxpayer who invests in residential property to let in another member state cannot benefit from accelerated depreciation and therefore creates discrimination and a barrier to the free movement of capital. In Greece, Greek taxpayers who voluntarily disclose funds, which are held abroad, can benefit from a temporary tax amnesty. In addition, if they transfer these disclosed funds to a bank account in Greece for at least a year they are meant to pay a 5% tax of the funds while the applicable tax rate is 8% for those funds, which are maintained out of Greece. This is an obstacle to the free movement of capital. In Spain, inheritance and gift tax are regulated at both state level and at the level of autonomous communities. In practice, the autonomous communities' legislation leads to a substantially lower tax burden for the taxpayer than the state legislation does. When the gift or inheritance does not fall within the jurisdiction of an autonomous community, only the state legislation applies. This is particularly the case where the recipient is resident abroad or when gifts of property are located abroad. As a consequence, the taxpayer has to pay more taxes than if he/she had been living in Spain or if gifts of property were located in Spain. (F.G./transl.fl)