Brussels, 20/04/2006 (Agence Europe) - The European Commission has published a report by a group of experts examining EU fiscal compliance to cross-border securities trading. The study analyses the procedures used in the various Member States. “The FISCO study will help us to identify and tackle many of those fiscal compliance practices and procedures that are current barriers to more efficient pan-European securities trading in the EU”, Charlie McCreevy, Internal Market Commissioner, said in a press release. “This is an area that was highlighted as one to be addressed by the group of financial experts chaired by Alberto Giovannini and is an area where we need to make further progress to help deepen financial market integration”, he added. The report will serve as a basis for discussion with Member States in order to evaluate the solutions possible for eliminating tax obstacles to cross-border securities trading within the EU.
The 15 experts examined the “Giovannini” obstacles 11 and 12 relating to procedures in relation to withholding and transaction taxes. They came to the conclusion that: (a) withholding tax collection and relief procedures vary considerably among Member States and different procedures often apply even to different classes of securities within the same Member State; (b) the complexity and administrative costs resulting from these differences may lead investors to forego the relief to which they are entitled and may discourage cross-border investment for the same reason; (c) in several cases, procedural tax rules often prevent foreign intermediaries from obtaining direct access to the local Central Securities Depository (CSD), or at least do not allow them to obtain access under conditions similar to those applicable to local intermediaries; (d) tax rules that impose tax collection responsibilities on settlement service providers do not always take into account the fact that securities transactions may be handled by several local or foreign settlement service providers. These rules do not allow all settlement service providers to collect transfer taxes under similar conditions; and (e) this issue may put certain settlement service providers at a competitive disadvantage in comparison with others.