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Commission calls for opinions on venture capital taxation

The European Commission said that it wants to improve taxation rules for cross-border venture capital spending, and has launched a consultation of businesses to find out how to achieve this goal.

Mismatching between the tax systems of EU member states cause unnecessary administrative burden for investors, and pose an obstacle to economic growth, the Commission said in a statement. The consultation, which was launched on 3 August, will run until November 2012.

“Venture capital is an essential source of financing for companies, in particular innovative start-up SMEs facing the costs of developing know-how,” said Algirdas Smetana, the taxation and customs commissioner. “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 Commission says it is not yet certain that it will develop an actual “policy response” on the tax issue, but wants to wait for the result of the consultation.