09-01-2023 17:00
Potential Distortions of the Single Market due to Personal Income Tax

Meghallgatások FISC
European Parliament, Building Altiero Spinelli (Room 1G-3), Brussels
FISC Public hearing
Public hearing on “Potential Distortions of the Single Market due to Personal Income Tax: challenges for SMEs and risks of harmful tax competition” © Image used under the license from Adobe Stock

On 09 January 2023, from 17:00 to 18:30, the FISC Subcommittee hosted a public hearing on "Potential Distortions of the Single Market due to Personal Income Tax: challenges for SMEs and risks of harmful tax competition". The transformation of the way how we work through digitalization and globalization has been accelerated during the COVID19 pandemic and has led to a significant increase of remote working. These developments have also created new challenges in the area taxation.

Companies with employees from neighbouring countries are faced with the question of how cross-border workers are taxed when they telework, implying risks of double taxation and an increased administrative burden. Meanwhile, there are growing concerns that governments could take advantage of the transformation of the world of work by introducing preferential tax regimes to attract remote workers or so-called 'digital nomads', which could eventually lead to a new form of harmful tax competition.

The experts invited to this hearing were invited to discuss the potential distortions of the Single Market due to personal income tax that arise in this context. They discussed the new challenges in this area for SMEs as well as the risks of harmful tax competition and discuss possible solutions at an EU and international level.