Fabian Demicoli

Vince Farrugia’s report adopted as EESC Opinion

Tackling Cross Border Inheritance Tax obstacles – Last Tuesday (18th September) another
report presented by Vincent Farrugia, EESC Employers Representative and GRTU
Director General, as appointed rapporteur was formally adopted as EESC Opinion
with 135 votes in favour, 1 against and 11 abstentions.

The Farrugia report is now the official
EESC Opinion to the Commission Communication on Tackling cross-border
inheritance tax obstacles within the EU and the Commission recommendation
regarding relief for double taxation of inheritances.

EU citizens who inherit assets across
national Member State borders are frequently faced with taxation in two or more
different Member States (i.e. double or multiple taxation) and tax
discrimination. These problems often impose undue hardship on citizens and
hamper the achievement of the EU-2020 objectives. In an attempt to address
these problems, the Commission presented a Communication in 2011 and an
accompanying Recommendation.

In his report Mr Farrugia stated that
the EESC is in favour of removing double/multiple and discriminatory taxation,
and welcomes the approach adopted by the Commission which respects the tax
sovereignty of individual Member States while calling for better interfacing of
national tax systems.

It is however the opinion of the EESC
that the Commission can be more effective in achieving the final aims of this
exercise by:

  • proposing and implementing practical mechanisms which,
    within a reasonable period of time, would ensure the efficient interfacing of
    national tax systems with respect to inheritance taxes, while encouraging
    Member States to institute and operate double/multiple taxation relief
    mechanisms in a more effective and flexible manner;

  • using legislative mechanisms so as to effectively
    eliminate inheritance tax double/multiple taxation of EU citizens;

  • going beyond cross-border taxation issues to look into
    the potentially distortionary effects arising from differences in the
    computation of the inheritance tax base by different national tax
    jurisdictions, by setting common principles applicable across the EU which are
    based on fair net asset valuations and which safeguard the business entity unit
    as a going concern;

  • actively promoting more effective, efficient and
    citizen-friendly taxation systems, involving the least possible burden on

  • studying the issues which impinge on EU citizens
    arising out of global cross-border inheritance taxes;

  • studying the possibility of simplifying inheritance
    taxation in cross border situations through a system which imposes taxation
    once at a sole point of taxation determined by the location of the asset.





 The EU Taxation Observatory, whose
creation under the auspices of the Commission has been suggested in EESC
opinions  dealing with multiple and
discriminatory taxation, could serve as the instrument through which the above
recommendations are implemented.

This is the fifth successful Farrugia
report being adopted as EESC Opinion.

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