Brussels, 03/12/2008 (Agence Europe) - On Tuesday 2 December, the Ecofin Council adopted a resolution on coordinating exit taxation. Through this resolution, the member states undertake to adopt principles to avoid double taxation, as may result from a transfer of economic activities subject to at least two national jurisdictions. This instrument constitutes an "institutional innovation" in the hyper-sensitive field of direct taxation, a European source stressed, adding that this is not a matter of harmonisation, but it is better than a pious wish expressed in conclusions.
In its communication published at the end of 2006 on exit taxation (see EUROPE 9331), the Commission stated that double taxation may arise if the exit state calculates the exit value of an asset transferred in the event of a wash sale when the taxpayer leaves the country, and if the new state of residence taxes all of the added value realised between the acquisition and effective sale. The same may occur due to different national methods for calculating the assets of businesses. (M.B./transl.fl)