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European Commission

Press release

Brussels, 3 August 2012

Taxation: Commission consults on tax obstacles to cross-border venture capital investment

Today the European Commission has launched a public consultation to collect factual examples of direct tax problems that arise when venture capital is invested across borders. Due to mismatches between the tax systems of the EU's 27 Member States, venture capital funds can face problems of double taxation as well as legal and administrative uncertainty when they invest across borders. These problems could hinder the full development of the venture capital market in Europe and therefore compromise the provision of financing to the EU's most innovative small and medium-sized enterprises (SMEs).

Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: "Venture capital is an essential source of financing for companies, in particular innovative start-up SMEs facing the costs of developing know-how. SMEs are the backbone of the EU's economy and help to generate economic growth and new jobs. It is therefore the collective responsibility of the Commission and Member States to find solutions to tax obstacles that hinder cross-border venture capital within the EU."

The aim of the public consultation is to find concrete examples of direct tax problems and to assess the impact of these problems in terms of additional costs to investors and SMEs in the EU. The Commission also seeks suggestions from respondents on feasible solutions to address any such problems. On this basis, the Commission will be able to decide if there is a need for EU-level solutions to remedy the problems and develop the most appropriate policy response by 2013. The Commission has invited all interested parties, including individual citizens, businesses and business organisations, tax administrations and tax professionals in academia, to provide their views on this matter by 5 November 2012.


The Commission stated in its 2011 Communication on improving access to finance for SMEs (see IP/11/1513) that in 2012 it would complete an examination of the tax obstacles that hinder cross-border venture capital investment with a view to presenting solutions in 2013 that would aim to eliminate any such obstacles while at the same time preventing tax avoidance and evasion.

In 2010 a group of tax experts established by the Commission identified in a report the main ways in which mismatches between the 27 tax systems across the EU could potentially lead to double taxation, tax treatment uncertainties and administrative obstacles for cross-border venture capital investment (see IP/10/481). Although the report provided an overview of the tax issues which might arise, there was a lack of empirical evidence that these cause problems in reality. More evidence of the impact on the venture capital industry of the current mismatches between tax systems and of the potential benefits that could result from changes in tax law are needed if the Commission is to ask

Member States to put in place more favourable tax structures for venture capital investment.

Contributions may be sent to no later than 5 November 2012.

The public consultation is available here:

For more details on venture capital and taxation:

Homepage of Commissioner Algirdas Šemeta, EU Taxation and Customs Union, Audit and Anti-fraud Commissioner:

Contacts :

Emer Traynor (+32 2 292 15 48)

Natasja Bohez Rubiano (+32 2 296 64 70)

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