The creation and growth of businesses can also be encouraged by improving access to finance, adopting tax systems to reward success and providing business support services, notably for young entrepreneurs.

That would drive you, much more naturally I would think, to the corporate and personal income tax systems, which are designed as progressive instruments, particularly the personal income tax side, and out of the payroll tax side, which, for reasons that we have described already, is an inferior way of collecting taxes.

Member States need new revenue sources, while businesses need simpler tax systems with fewer compliance costs.

Whilst fair competition between tax systems, aimed at creating favourable conditions for workers, employers and consumers is to be welcomed, destructive competition, benefiting few and hurting many, could undermine the whole EU.

The study, which is to be completed within a year, will have to answer the following main questions: (a) Do the disparities which exist between corporation taxes and the tax burdens on companies from one Member State to the next induce distortions in investment decisions which are incompatible with the functioning of the internal market? (b) If so, can those distortions be eliminated simply through the interplay of market forces and competition between national tax systems or are Community measures required? (c) Should any action at Community level concentrate on one or more elements of company taxation, namely the different corporation ...[+++]tax systems, the differences in tax treatment associated with the legal status of companies, the tax base or rates?

It occurs when cross-border companies escape paying taxes due to mismatches between national tax systems.