The European Commission adopted a Communication last week with the objective of contributing to the definition of a clear and definitive tax regime for small and medium European businesses that conduct trans-national activities. The Executive at the request both of employers’ associations and of the competent national authorities proposes the principle of so-called “taxation according to State of residence”, in conformity with which “businesses can calculate their own tax benefits according to the tax regime of the State of residence of the mother company or of the registered office”. The Commission’s Communication, awaited for over two years (http://europa.eu.int/comm/taxation_customs/taxation/company_tx/home_state_taxation/index_en.htm), provides detailed information on the proposed future system of taxation which ought to facilitate business mobility and the chance to open branch offices or affiliates abroad while at the same time reinforcing the EU internal market.
