What specific cross-border tax problems do SMEs currently face?
Generally, the tax obstacles to cross-border economic activity are identical for small and medium-sized enterprises and larger companies. However, the impact of many obstacles on SMEs is stronger as they have, simply due to their smaller size, less economic and human resources and tax expertise available. There are two areas which are of additional, particular importance for SMEs. First, SMEs have particular difficulties in meeting the compliance costs resulting from the need to deal with up to 25 different taxation systems. This finding is strongly supported by tax practitioners and business federations which represent SMEs’ interests. Available general studies suggest that compliance costs are regressive to size and put a disproportionately higher or even prohibitively high burden on small and medium-sized enterprises compared to bigger companies. Second, among the other more specific tax obstacles to cross-border economic activity in the Internal Market, the cross-border offsetting
