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EC Will Not Challenge Member States On Royalties Tax

by Ulrika Lomas,, Brussels
05 August 2015

Tax Commissioner Pierre Moscovici has said that European Commission law was not breached in the case of a French professional association taxing royalty payments earned by UK musicians in France.

In a written question to the European Commission, Julie Girling, a UK Member of the European Parliament (MEP), alleged that the action of the Société des auteurs, compositeurs et éditeurs de musique (Sacem) violated the double tax agreement (DTA) between the UK and France. Girling asked whether the Commission was aware of the action and what the Commission was doing "to prevent the double taxation of royalties in cross-border situations within the EU."

Answering on behalf of the Commission, Moscovici pointed out that there is no European Union (EU) legislation dealing with the taxation of royalties of individuals. He said that EU member states have broad freedom to design their tax systems and to share taxing rights with other member states if they so choose. While member states must respect their obligations under EU treaties, EU law does not oblige them to eliminate double taxation.

"Member states retain the power to decide whether to conclude double taxation treaties or not and in the event they do, they can decide how to allocate taxing rights under their treaties and subsequently how to apply these treaties," Moscovici explained.

He confirmed that preliminary examination of the information provided by Girling did not lead to the conclusion that Commission law had been breached.

Moscovici did however state that the Commission "is conscious that double taxation is a cross-border tax obstacle which hinders the effective functioning of the internal market." It has set up an expert group to examine problems in this area and launched an initiative to eliminate tax discrimination on mobile EU citizens.


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