Brussels, 03/04/2012 (Agence Europe) - On Monday 2 April, the European Commission launched an in-depth investigation of direct tax systems in various member states to see whether they are penalising workers who live in one member state and work across the border in another compared with workers residing in the country where they work. Any such discrimination would violate the EU's single market rules. The investigation will continue throughout 2012 as a measure to help boost the single market. There are some 1.2 million “cross-border workers” in the EU. The investigation will be used to tackle tax obstacles that put people off working in other member states at a time when worker mobility is seen by the Commission as a way of encouraging growth and jobs in Europe.
The Commission will be investigating whether workers who receive most of their income from another member state pay higher taxes than workers living in the state of employment. They will examine whether all the personal taxes calculated in line with the worker's family situation, for example, are levied equally for resident and non-resident workers. It will check whether member states make a distinction between residents of their own country and residents of another member state who occasionally work in their country vis-a-vis the right to deduct expenses and the application of different rates of tax. The study will examine the situation of freelance workers and retired people as well as employed persons.
At the end of the investigation, the Commission will inform member states of any loopholes or failings it has found so that they can make the necessary correction. If member states refuse to take action, the Commission may decide to launch infringement proceedings against the offending country or countries. (FG/transl.fl)