A system of liberalised taxation to encourage cross-border donations to independent research foundations has been suggested by the European Commission, which wants tax reform to promote private research investment, writes Keith Nuthall.
In a policy paper, the Commission calls for a common "non-discriminatory approach to the tax treatment of such foundations and their donors and beneficiaries" shared by all European Union member states. This would require common agreements on taxation of research foundations, for instance on their definition.
The Commission says: "The mutual recognition of public-benefit organisations entitled to tax relief would be an important step to facilitate cross-border funding. Member states are invited to support a common approach regarding... the tax treatment of the foundations themselves, irrespective of where they are established in the EU."
It believes the plethora of national taxation laws impedes cross-border donations. "Although some large research foundations exist, this source of funding is underexploited in Europe when compared with the US," it said.