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Brussels, 29 June 2006

Internal Market: infringement proceedings against Sweden and Greece

The European Commission has taken action against Sweden and Greece to ensure that they implement Internal Market laws correctly. The Commission will formally request Sweden to modify an aspect of its taxation legislation requiring foreign financial institutions that are not formally established in Sweden to provide the Swedish tax authorities with annual information on any business they do with Swedish residents. The Commission considers that this requirement tends to dissuade foreign financial institutions from providing cross-border services in Sweden and is therefore incompatible with EC Treaty rules on free movement of services and free movement of capital. The Commission will also formally request Greece to modify its legislation on company law rendering valid decisions on capital increases in public limited liability companies taken by the Greek government. The Commission considers this to be incompatible with EU company law, which requires these decisions to be taken at a general meeting. These requests take the form of "reasoned opinions", the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. If there is no satisfactory reply within two months, the Commission may refer the matter to the European Court of Justice.

Sweden – law on tax returns and tax information

The Commission has decided to send Sweden a reasoned opinion concerning its law (2001:1227) on tax returns and tax information which is considered incompatible with EU law. The law places a substantial reporting burden on foreign financial institutions, dissuading them from marketing and providing cross-border services to customers resident in Sweden. The Commission considers this to be an unjustified restriction on the freedoms of services and capital.

According to the law, foreign financial institutions, engaged in actively marketing their services in Sweden, without being established in the country, are obliged to provide the Swedish Tax Authorities with detailed annual statements on their business with Swedish customers. The information in question comprises the value of all the assets placed with the foreign institutions, as well as interest, dividends and other income received from, and interest paid to, the institutions. These onerous reporting requirements tend to dissuade foreign financial institutions from providing cross-border services in Sweden and thereby to restrict the freedom of services, as well as indirectly the freedom of capital.

EU law provides for exchange of tax information between Member States. In accordance with this, Sweden may, in cases of suspected tax evasion, request tax information on Swedish citizens from the public authorities of other Member States, who would collect the information from their financial institutions under their national rules. Requesting such information directly from foreign institutions, and doing this on a regular, comprehensive, annual basis, is not covered by EU legislation and appears unjustified.

Greece – company law

The Commission has decided to send a reasoned opinion to Greece on the grounds that Article 28 of Greek Law 2685/1999 of 18 February 1999, in the Commission's opinion, infringes Article 25(1) of the Second Company Law Directive (Directive 77/91/EEC). The Greek law renders valid, under certain conditions, certain capital increases in Greek public limited liability companies that had been effectuated in the past by decision of the Greek government, and not by decision of the general meeting as provided for in Article 25(1) of the Second Company Law Directive. These decisions had previously been declared invalid by Greek national courts.
The latest information on infringement proceedings concerning all Member States is available at:

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