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Luxembourg's Frieden Calls For European Tax Strategy

by Ulrika Lomas,, Brussels

30 January 2014

While underscoring the importance of the uniform implementation and consistent enforcement of financial market regulations, Luxembourg's Luc Frieden also emphasized the need for a European strategy on tax matters.

During a keynote address at the 6th European Congress of the Financial Markets Association ACI, which took place in Luxembourg City, Frieden made clear that some common rules, such as minimum and maximum levels of taxation of companies and individuals are necessary, to fully benefit from European financial markets.

Since the European Union Council meeting in Feira, Portugal, little progress has been made and "we are very far from a tax harmonization in Europe," Frieden explained. Conceding that tax competitiveness is "healthy," Frieden nevertheless advocated reasonable minimum and maximum tax rates and a limited number of rules on what is to be taxed, to prevent both unfair tax competition and the flight of capital out of the European Union.

Frieden said: "An integrated, well-functioning European market for financial products and services, embedded within a stable policy environment, will strengthen the EU's competitiveness, improve resource allocation, reduce its exposure to external shocks, enhance its economic cohesion and attract foreign investors. Such a reinforced position will definitely improve our chances to achieve the full benefits of the Union's enlargement, which is the next unavoidable historical challenge we are facing."

He ended: "I am perfectly aware that concepts such as financial integration and structural reform, enlargement as well as globalization are frequently perceived by parts of public opinion with a sense of skepticism or downright fear. It is our duty to raise the level of awareness and acceptance of the major benefits that the realization of these concepts can bring to every citizen."

TAGS: individuals | environment | tax | Portugal | corporation tax | Luxembourg | enforcement | tax rates | regulation | individual income tax | services | Europe

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