6. Bearing in mind that recommendations to Member States for the purposes of the European Semester relate most often to strengthening of the tax collection system, the prevention of tax evasion, sound revenue management, and the calculation of tax expenditures, the main object being to enhance competitiveness, which implies a need for a stable, predictable tax system and for better management and greater efficiency in the existing tax system, considers it essential for Member States to exchange knowledge and experience in the field of tax administration; calls on the Commission, therefore, to make rapid and effective use of the Fiscalis and Hercules III pr ...[+++]ogrammes and, in cooperation with the Member States, to channel European structural and investment funding towards capacity building and the exchange of knowledge and experience among Member States with a view to achieving a high standard of tax policy implementation;

Currently Member States apply different tax qualifications to hybrid loans (either debt or equity), which causes payments under a cross border hybrid loan to be treated as a tax deductible expense in one Member State (where the loan was paid) and as a tax exempt distribution of profits in the other Member States (where payment was received).

Due to different tax qualifications given by Member States to hybrid loans (debt or equity), payments under a cross border hybrid loan are treated as a tax deductible expense in one Member State (the Member State of the payer) and as a tax exempt distribution of profits in the other Member State (the Member State of the payee), thus resulting in an unintended double non-taxation.

This is the case even if the profit distribution has been treated as a tax deductible payment in the Member State where the paying subsidiary is resident.

A loss of tax revenues amounts to the consumption of State resources in the form of tax expenditure.

This type of re-organisation is often accompanied by cross-border mergers and acquisitions, which currently result in a combination of one-off and ongoing tax costs.