The European Commission has launched a public consultation to establish direct tax problems that arise when venture capital is invested across borders. According to the Commission, venture capital funds can face problems of double taxation due to mismatches between the tax systems of the EU's 27 Member States, along with legal and administrative uncertainty. These problems could hinder the full development of the venture capital market in Europe and the provision of financing to the EU's small and medium-sized enterprises. The Commission has invited all interested parties to provide their views on this matter by 5 November 2012.

The aim of the public consultation is to find concrete examples of direct tax problems and to assess the impact of these problems in terms of additional costs to investors and SMEs in the EU. The Commission also seeks suggestions from respondents on feasible solutions to address any such problems. On this basis, the Commission will be able to decide if there is a need for EU-level solutions to remedy the problems and develop the most appropriate policy response by 2013.

For full details on the consultation see http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/881&format=HTML&aged=0&language=en&guiLanguage=en