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Taxation and Customs Union

Commission policy

Monitoring application of Community law

Numerous complaints from citizens and civil society organisations about taxation and customs matters are registered and analysed. New infringement cases are also detected in the course of the European Commission's own investigations.

Some complainants lodge a petition before the European Parliament (EP), sometimes in parallel with their complaint to the Commission. Petitions are sent to the EP but are examined and dealt with by Commission services which can launch infringement proceedings in cases showing an infringement situation.

Monitoring application of Community tax law has recently moved from a rather reactive to a more pro-active infringement policy in general. Although the Member States have been implementing the existing secondary Community law, i.e. the EU directives, a significant number of potential infringements still exist in their national legislation. In 2014 Member States' tax provisions are to be scrutinised to ensure that they do not discriminate against mobile EU citizens, in a targeted initiative launched by the Commission. See the press release (IP/14/31). This aims to complement a previous initiative, which looked at the tax treatment of cross-border workers (IP/12/340).

The rapidly growing European Court of Justice case law on direct taxation has also focused the Commission's priorities on consistent follow-up and implementation of the judgments in the different Member States. Monitoring the compatibility with the TFEU (Treaty on the Functioning of the European Union) of Member States' tax legislation on dividend payments has therefore been one of the central areas of activity in this connection.

Screening of the legislation of the new Member States resulted in a considerable number of infringement cases for non-notification of national implementing legislation or incorrect application of the Community law on indirect taxation (VAT and car taxation). One of the parameters used for screening the legislation was comparison between the national legislation and the Court's existing case law in this area. Screening of the legislation relating to recent directives helps to ensure harmonised implementation of Community law.

Interaction with co-ordination initiatives

The Commission in December 2006 launched a co-ordination initiative on direct tax matters through the publication of a Communication on the "Co-ordinating Member States' direct tax systems in the Internal Market" (COM/2006/823 ). The EU Council on 2 December 2008 adopted a Resolution on co-ordination in one specific area, namely exit taxation. In March 2009, the Commission considered it appropriate to reiterate its position as regards the interaction between the various ongoing co-ordination initiatives and the Commission's infringement action, by addressing a letter to all Member States.