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EC to investigate taxation of cross-border workers

EC to investigate taxation of cross-border workers

Contractors accountants may be interested in a new a new European Commission initiative initiative that aims to make sure cross-border workers are treated fairly when it comes to their tax affairs.

There are about 1.2 million cross-border workers in the EU and this figure is set to increase. A mobile workforce has already been recognised as an important driver to increase employment and business growth across Europe.

Throughout this year, the European Commission will be assessing national direct taxes to see whether workers that cross borders to get to work are disadvantaged.

Algirdas Šemeta, the commissioner for taxation, explained that EU regulations state all citizens are entitled to equal treatment within the single market. Workers have the right to free movement and there must be no discrimination. The majority of EU countries respect these regulations, but the commission will take steps to make sure they are reflected in tax rules if necessary.

If discrimination is unearthed, national authorities must be prepared to make the necessary amendments and if the problem persists, infringement proceedings will be instigated against the offending government, he added.

This is part of the wider campaign to remove the obstacles that are deterring cross border mobility. This includes cases where European citizens earn the majority of their income in a different country and pay more tax than the citizens of that nation. The commission will also make sure that non-resident workers are entitled to the same deductions as residents.

The commission will look at the way individual EU countries’ tax systems affects the employed, self-employed, pensioners and dependents.

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Image: euro by Lawrie Cate

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