WRITTEN QUESTION E-1277/00 by Jan Andersson (PSE) to the Commission. Taxation in Finland of pensions accrued in Sweden.
C 53 E/120 Official Journal of the European Communities EN 20. 2. 2001 (2001/C 53 E/152) WRITTEN QUESTION E-1277/00 by Jan Andersson (PSE) to the Commission (19 April 2000) Subject: Taxation in Finland of pensions accrued in Sweden It has come to my attention that when Finnish nationals who have worked in Sweden return to Finland, the pensions to which they have accrued entitlements in Sweden are also taxed by the Finnish authorities. The pensioners concerned consider that this constitutes unreasonable double taxation and is also an obstacle to the free movement of workers between two EU Member States. Has the Commission noted the situation with regard to Finnish taxation of pensions accrued in Sweden, and is the Commission working on any plans which might lead to a change in it? Answer given by Mr Bolkestein on behalf of the Commission (9 June 2000) In the absence of harmonisation at Community level, the allocation of taxation rights in bilateral relations is, as recently confirmed by the Court of justice (1), within the competence of Member States. The normal mechanism is conventions for the avoidance of double taxation. Although such conventions do not exist between all Member States, all those with a common border have concluded conventions. Relations between Finland and Sweden are governed by the Convention of 23 September 1996 concluded between the Nordic Countries, as modified by a Protocol of 6 October 1997. According to Article 18(1) of this Convention, pensions paid from a Contracting State (Sweden) to a resident of another Contracting State (Finland) are taxable only in the first-mentioned State (Sweden). However, according to Article 25(3)(d), where a resident of Finland derives income which, in accordance with the provisions of the Convention is taxable only in another Contracting State (Sweden), Finland may include such income in the tax base but shall allow as a deduction from the Finnish tax on income that part of the income tax which is attributable to the income derived from that other State (Sweden). Although the result of Article 25(3)(d) may be an increase in the progressive tax paid on other income in Finland, no double taxation would appear to arise on pensions paid to Finnish residents who have worked in Sweden. In the absence of indications that double taxation is actually arising, it is difficult to see what action the Commission could take in this specific instance. Nevertheless, it may be noted that the Commission is currently examining the tax treatment of pension arrangements. (1) Judgement of 12 May 1998, Case C-336/96 Mr and Mrs Gilly, point No 30. (2001/C 53 E/153) WRITTEN QUESTION E-1280/00 by Emmanouil Mastorakis (PSE) to the Commission (19 April 2000) Subject: Natural disasters I On 14 October 1999, tabled an oral question to the Commission (H-0603/99) concerning the establishment of a legal basis for aid in the event of natural disasters within the European Union. In its answer, the Commission stated, inter alia, that á Parliament did not consider it useful to send a clear political signal for the re-entry of urgent aid (in the budget) í and that á it is up to Parliament clearly to express its position í. On 2 December 1999, following the adoption of the Bourlanges report by Parliament, I tabled another oral question (H-0763/99), to which the Commission also replied in the negative. Parliament has, however, already adopted a resolution on the guidelines for the 2001 budget procedure ü Section III ü Commission (A5-0070/2000 ü the Haug report), paragraph 34 of which expressly refers to the need to áre-establish line B4-3400í so that urgent needs caused by natural disasters can be addressed immediately