Expats and business owners who deal with authorities in more than one European Union country should be able to deal with cross border matters such as tax more easily, officials have confirmed.
In particular tax matters and services should not be a maze for European citizens but clear and transparent, according to the European Economic and Social Committee (EESC). It has issued two opinions which both aim to reduce the number of cross border difficulties experienced by European citizens and businesses alike.
In the opinions, the EESC promotes the importance of a transparent, yet smoothly functioning system to instill confidence in citizens and businesses when dealing with cross border matters. Improving the single market for services is the focus of the one opinion, whereas another opinion engages with the problem of cross border tax obstacles.
Services are the main driver of the EU economy and according to the Commission this sector accounts for around 70% of EU Gross Domestic Product. In recent years, there has been a marked shift to knowledge-based industries.
The opinion argues that greater integration and a better functioning of service markets should enhance EU competitiveness. The EESC therefore praises the ‘points of single contact’ system, which facilitates easier access to country specific information in each Member State.
The opinion did however raise several concerns. The EESC considers that the conclusions drawn by the Commission on the impact of the services directive are premature. The directive has been in force for only a few years and it is difficult to fully understand the effects to the services sector. Finally, the EESC considers that these aspects should be examined in the light of the new treaty.
The EESC said it believes that there should be adequate mechanisms in place to ensure operating procedures are simple and clear, to assist citizens. ‘Citizens have been hitherto left alone in having to follow correct tax procedures. To remedy this, the EESC recommends the establishment of one stop shop services, whereby citizens can obtain information, pay taxes and receive the necessary documentation to be used across the whole EU,’ it said.
It also calls for a simplification of the administrative procedures applied to cross border situations, to be undertaken on a bilateral and multi lateral basis across member states.
As an essential instrument to put this in practice, the EESC recommends the setting up of an independent Cross Border Taxation Observatory with specific resources and functions clearly entrusted to it.
The EESC would also encourage the provision of advance tax rulings to give information on final tax liability outcomes, which are specifically tailored to the individual taxpayer. The aim of the EESC recommendations is to provide transparency and simplicity for citizens when dealing with their taxes.