Such double taxation arises where, for example, one EU Member State increases the taxable profits of a company from its cross-border intra-group transactions and the other Member State of the associated enterprise does not make a corresponding downward adjustment to the taxable profits of that enterprise.

A frequent situation is where one tax administration, for tax purposes, adjusts the transfer prices charged between associated enterprises to bring the intra-group transfer prices into line with those that it considers would have been agreed between unrelated enterprises.

A growing problem is the double taxation that can arise where an EU Member State increases the taxable profits of a company from its cross-border intra-group transactions and the other Member State of the associated enterprise does not make a corresponding downward adjustment to the taxable profits of that enterprise.

IV. CALLS UPON THE MEMBER STATES AND THE COMMISSION to examine, in mutual consultation, to what extent the legal provisions of the Member States and of the Community could place a specific extra burden on small and medium-sized enterprises, by - pinpointing existing legal provisions hindering the creation, growth and transfer of businesses, - analysing the problem of excessive additional burdens caused by differences of approach between the legal systems of the Member States and the Community, - taking stock of the situation regarding the various burdens placed in particular on SMEs developing transfrontier activities, - examining the p ...[+++]ossibilities for cooperation between SMEs (for example cooperation in networks for joint purchases and sales) in the framework of Community competition law, - examining the possibility of establishing national contact points to help enterprises, in particular SMEs, to deal with possible intra- Community trade barriers.

It confers an advantage on particular enterprises, unlike general measures which benefit firms throughout the economy, and it can affect intra-EEA trade.

This proposal for a Directive, which was likely to be adopted very shortly by the Council, aimed in particular to simplify: - intra-Community purchases of products subject to excise duty (mineral oils, tobacco and spirits) by easing the VAT monitoring requirements, and - triangular transactions, i.e. those where an enterprise in country A purchased goods in country B in order to supply them to a customer in country C. This latter simplification was very important for firms since it meant that the seller need not register for VAT purposes in country C or use a representative there. The customer would be directly designated as the party li ...[+++]able for payment of VAT.