WRITTEN QUESTION E-0103/00 by Jo Leinen (PSE) to the Commission. Compatibility with Community law of a Danish law on the levying of capital gains tax in the event of transfer to another Member State.
C 374 E/24 Official Journal of the European Communities EN 28. 12. 2000 Since, under Regulation (EC) No 1260/1999, it is up to the Member State to designate these partners, the Commission considers that the Spanish Government has satisfied its obligations with regard to compliance with the principle of partnership in preparation of this RDP. (1) OJ L 161, 26. 6. 1999. (2000/C 374 E/029) WRITTEN QUESTION E-0103/00 by Jo Leinen (PSE) to the Commission (26 January 2000) Subject: Compatibility with Community law of a Danish law on the levying of capital gains tax in the event of transfer to another Member State A Danish law dating back to 1987 stipulates that the earnings from shares belonging to Danish citizens who move to another Member State are to be taxed. This means that people who are obliged to live and work in another EU country for professional or other reasons are subject to discrimination. Is paragraph 13a of the law on capital gains from shares (Lovbekendtgorelse 1987-11-05 No 698, 1. Karnovs Lovsamling 6 (1988), p. 5880) compatible with Articles 43, 56, 18 and 12 of the EC Treaty? 2. If it is not, what steps will the Commission take to make Denmark comply with Community law? Answer given by Mr Bolkestein on behalf of the Commission (9 March 2000) The Commission is aware of the Danish tax rules according to which non-realised capital gains resulting from shares are taxed, if a person leaves the country. Similar rules exist in Germany, France and Austria. The Danish law subjects capital gains on shares realised in Denmark to tax. In order to treat the taxpayer who leaves the Member State for a Member State where capital gains are not taxed, at equal footing, his latent tax liability with regard to capital gains is assessed when he leaves Denmark. However, this tax is not immediately due, but becomes payable only once the capital gains are realised, which means that the shares in question are effectively disposed of. The tax is assessed on the base of the capital gains calculated at the moment of leaving Denmark, but if the value of the shares goes down later, Denmark allows a new calculation of the tax so that only the effective capital gains are taxed. Moreover, tax on capital gains levied in the new Member State of residence are fully credited against the Danish tax liability. It is true that the tax assessed must be guaranteed by the taxpayer on exit from Danmark, but the Danish authorities accept (part of) the shares as security. There appears to be no material difference in the tax treatment of Danish residents and others who leave Denmark. At any rate, the Commission will further examine the compatibility of the Danish rules with Community law, because a complaint on the same matter has been lodged with it and is currently under consideration