Multinationals Push Common EU Pension Tax Breaks

June 10, 2002 ( - Multinational companies are gearing up for a legal battle over the differing tax treatment given to European corporate pension plans.

With most European Union nation’s only granting tax breaks to their own pension plans, multinational companies have had a difficult time pooling their pension plans, according to a Dow Jones report.

One of the companies, AMS Management Consulting Ltd., said is preparing court papers in case it decides to take the fight into court involving a UK employee who the company wants to enroll in its Dutch pension program.

AMS has asked UK revenue authorities to approve the same tax breaks as available under the UK plan for its employee. If the UK refuses, AMS said it is prepared to take its court fight as far as to the European Court of Justice.

If countries discriminate against foreign pension plans, companies say they will have to continue offering separate programs.

Helping Hand

The group has received support from a recent opinion of a legal expert at the European Court of Justice.

Unlike the UK case, where the AMS worker remained in his home country, this involved a German doctor who moved to Finland . When the Finnish authorities refused to give tax breaks for his German pension plan, he sued.

The advocate general, who advises the court, said in March that the Finnish tax provision violates EU law. The court usually follows the advocate general’s opinion.