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Taxation and Customs Union

Commission adopts its monthly infringements package

Taxation: EU Commission calls on BULGARIA, CYPRUS and PORTUGAL to transpose new transparency rules for the exchange of tax rulings

The Commission has decided to send reasoned opinions to Bulgaria, Cyprus and Portugal as these Member States have failed to communicate the transposition of new measures on the automatic exchange of tax rulings between EU tax authorities. Member States were supposed to transpose these measures by 31 December 2016.

The new rules are designed to help clamp down on cross-border tax avoidance, aggressive tax planning and harmful tax competition and the first exchange of information between all EU tax authorities is supposed to take place by this September. The Commission has set the three countries a deadline of two months to reply. In the absence of a satisfactory reply, the Commission may decide to refer the case to the Court of Justice of the EU.

In the meantime, the Commission has also welcomed the transposition of the same measures by the Czech Republic, Greece, Hungary and Poland and decided today to close the respective infringement cases. In a second step, the Commission will assess whether the legislation of all Member States comply with all requirements of the new rules.

Taxation: Commission asks FRANCE to end the unfavourable treatment for taxpayers who receive income from foreign sources

The Commission has asked France to amend certain provisions on how it calculates personal income tax. Current rules in France state that taxpayers resident in France and earning part of their income in another Member State of the European Economic Area (EEA) cannot benefit from the same personal and family tax advantages as applied to income earned in France.

Under French rules, the taxpayer is also unable to benefit from any refunds or deferrals of tax credits for income from foreign sources when the individual is in deficit. By retaining these provisions, France is in breach of its obligations under the Articles of the Treaty on the Functioning of the European Union (TFEU) and the Agreement on the EEA on the free movement of workers, the right of establishment and the free movement of capital.

If the French authorities fail to act within two months, the case could be brought before the Court of Justice of the European Union.

More information on Infringements