Hollande Renews Drive for EU Tax Harmonization

By ExpatBriefing.com Editorial 20 December, 2012

Following the latest European Council meeting in Brussels, French President François Hollande underlined the need to make strides to harmonize European fiscal policy as well as budgetary policy.

The French President also indicated his intention to renegotiate existing fiscal treaties to address the issue of tax exiles.

Highlighting the fact that tax harmonization is not simply a matter of converging corporate tax rates, Hollande underscored the need for discussions to take place on fiscal convergence to ensure that no disparity in taxation may be maintained at such a level that citizens of European Union member states "seek tax optimization via a certain number of mechanisms."

Rather than creating the same tax system, there is a need to prevent "fiscal dumping" as regards corporations and individuals, Hollande said.

Hollande announced plans to review "a certain number of fiscal agreements and fiscal situations," notably as regards inheritance. Underlining the need to allow an exchange of information, the French President explained that France and Switzerland are already in the process of concluding an inheritance tax agreement before seeing how the situation could be further improved. Hollande vehemently ruled out the idea of a tax amnesty or anything that could be perceived as an amnesty.

Hollande revealed plans to review tax treaties with European Union member states, including Belgium, with whom France already has a tax agreement. Hollande insisted that there is no way around this, stressing that France is forced to renegotiate the tax accord with Belgium to address the issue of those who have established themselves in "Belgian villages," an allusion to the recent decision by French actor Gérard Depardieu to renounce his French nationality and become domiciled in the Belgian village of Néchin.

France is clearly championing plans for tax harmonization to stem the exodus of French citizens to more fiscally attractive locations abroad, following the Socialist government’s assault on taxing the country’s wealthy. Advocated by the French Court of Auditors last year, the idea of taxing according to nationality rather than the place of residence has also once again resurfaced. It remains to be seen as to how matters will develop.

Tags: Individuals | Expatriates | Inheritance Tax | Tax | Investment | Belgium | Fiscal Policy | Agreements | France | Switzerland |


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