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Document 52007AE0408

Opinion of the European Economic and Social Committee on the Proposal for a Council Directive concerning indirect taxes on the raising of capital (Recast version) COM(2006) 760 final — 2006/0253 (CNS)

OJ C 161, 13.7.2007, p. 23–23 (BG, ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, NL, PL, PT, RO, SK, SL, FI, SV)
OJ C 161, 13.7.2007, p. 4–4 (MT)



Official Journal of the European Union

C 161/23

Opinion of the European Economic and Social Committee on the Proposal for a Council Directive concerning indirect taxes on the raising of capital (Recast version)

COM(2006) 760 final — 2006/0253 (CNS)

(2007/C 161/04)

On 16 January 2007 the Council decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 23 February 2007. The rapporteur was Mr Burani.

At its 434th plenary session, held on 14 and 15 March 2007 (meeting of 14 March), the European Economic and Social Committee adopted the following opinion by 159 votes to none, with six abstentions.

1.   Background


The proposal relates to the recast version of Council Directive 69/335/EEC on capital duty, which had been amended a number of times. The Directive — which was originally intended to harmonise tax systems and to prevent Member States from creating or levying other similar taxes — was amended on a number of occasions, until in 1985 it was acknowledged by Directive 85/303/EEC that capital duty should be completely abolished given its detrimental economic effects on businesses.


However, the losses of revenue which would result from such a change were unacceptable for certain Member States; the 1985 Directive therefore had to grant a derogation, giving Member States the opportunity to either exempt transactions from capital duty or charge a single rate of tax, not exceeding 1 %.


Of course, the principle still applies in the new proposal, which is merely a recasting of the previous texts; the EESC notes this and endorses it. However, the Commission's Explanatory Memorandum gives rise to a number of comments, which the Council may wish to take on board with a view to further initiatives.

2.   Conclusions and recommendations


The majority of the 25 Member States acted on the Council's 1985 recommendation, abolishing the duty completely; at present, only seven Member States are still levying it: Poland and Portugal, at a rate of 0.5 % or less; Cyprus, at a rate of 0.6 %; and Greece, Spain, Luxembourg and Austria, at the full rate of 1 %. This unequal treatment is a barrier to the creation of a level playing field between European businesses, which is one of the prerequisites for the single market to function properly. The fact that a good many other disparities and barriers continue to exist in the field of taxation is no excuse not to abolish this duty once and for all.


It would be useful for the Member States which continue to take up the derogation to compare the benefits in terms of tax revenue with the probable (and to some extent calculable) loss of investment from other EU and third countries, put off by a duty which is now extinct almost everywhere. The EESC believes that forfeiting the derogation would benefit stakeholders and be a step towards the proper functioning of the single market as a whole.


The EESC would also like to draw attention to a practice that has been adopted by a number of Member States, whereby new charges are introduced to surreptitiously replace the duty once it has been abolished. In some cases, the Commission has intervened and opened an infringement procedure, but other, unnoticed incidents cannot be ruled out. Vigilance on the part of the social partners could help to eradicate them.

Brussels, 14 March 2007.

The President

of the European Economic and Social Committee