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. Such 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."
Contributions are sought particularly from businesses and business organisation, tax administrations, tax professionals in academia, as well as members of the public.
The Commission will decide if there is a need for EU-level solutions by 2013.