EU pensions tax question easily solved - professor
NETHERLANDS - The European occupational pensions tax harmonisation question is just a technical one that could easily be solved, an eminent taxation expert said at the IPE Awards today.
Professor Gerry Dietvorst of Tilburg University said the problem, "can be solved in one afternoon by the ministers of finance".
He said the issue was merely a technical one that was "really quite simple" to rectify. "Double and non-taxation must be solved at the EU level."
"I believe the European pension propblem is one of the most urgent areas where a strong policy must be developed,"said Dietvorst in his keynote address to the IPE Awards seminar in Amsterdam today. Dietvorst is also chairman of the taxation committee of European insurance body the Comite Europeen des Assurance, or CEA.
He told delegates that double taxation could be avoided if the state of residence refrained from taxing the benefits to the extent that no tax deducation has been allowed, the so-called balance method. And tax credits should be paid if benefits are taxed at source.
And double non-taxation would be avoided if the state of residence taxed benefits where premiums were deducted in another member state. Taxation in the state of residence should amtch with taxation of benefits from domestic pension schemes, he added.
Key to the idea is that cross border pensions should be taxed as employment income in states where a TEE system is in place, that is, one where benefits are taxed.
"Maybe it's too simple,"he said, adding that it was surely better than changing 225 European tax treaties. "First of all, member states must trust each other."