It is likely that EU citizens buying or investing or working or moving frequently across borders will have to pay taxes and make tax declarations in two or more countries. This is often the case for:
- People living in one country and working in another (cross-border commuters or frontier workers)
- Workers posted abroad
- Retired persons abroad
Each EU country has the right to impose its own tax rules once they respect EU law by not, for example, discriminating against non-nationals. Even in areas where EU countries have agreed on a certain level of EU-wide harmonisation of rules, such as for Value Added Tax (VAT), excise duties on alcohol, tobacco and energy products, EU countries are mostly free to establish the tax rates that they wish.
This web page provides information on the most frequently arising cross-border tax problems faced by EU citizens within the EU and the ways in which the European Commission or EU countries’ tax administrations can assist. It also includes the contact details of the persons who can help you in a given situation.
Where an EU citizen suffers discriminatory tax treatment, there are remedies under EU law. In the case of other cross-border tax problems such as double taxation and double compliance costs, there are no binding remedies. However, the European Commission believes that EU citizens who exercise their right to move freely within the EU should not be penalised by facing these problems and is working in different ways to try to resolve these problems - see “Areas of work” page. Note that while the Commission has the power to make legislative proposals to tackle cross-border tax problems, the proposals will only become law if EU countries unanimously agree to them.
Finally, EU citizens should be aware that EU countries exchange information to ensure that taxpayers meet their tax obligations and that EU countries assist each other with recovery of taxes due. The EU information exchange and assistance arrangements of most concern to individuals are those under the Savings Directive, the Administrative Cooperation Directive and the Directive on mutual assistance for the recovery of taxes.