EEC & lack of joined up thinking
As I see it the problem is that some airlines are using the lack of a common labour policy across the EEC to their advantage.
The original document that set up the EEC made it clear that there was to be free movement of labour within the EEC and restricting a workers right to work in one EEC state by penalising them for being paid in another EEC state could be seen as a direct infringement of the Treaty of Rome.
At the moment the Danish tax authority's have withdrawn the bilateral tax agreement with Spain so in theory a Danish resident who is based in Spain could face the same income being taxed in two EEC states (and probably find a negative number as payment at te end of a months work !). This situation is obviously untenable as it restricts free movement of labour.
The social tax issue is also a problem with some EEC states wishing to get the social tax from all the people based in that EEC state and the EEC state that the person is resident in also trying to collect that Social tax.
All these attempts at the double taxation of a persons income are in direct conflict with other EEC regulations.
The problem is that when the EEC was set up the regulators simply did not foresee the free movement of Labour as more that a theeorectal aspiration and a thing that a few of the super rich could do. Forty years on the movement of labour within the EEC is common with thousands of people working it One EEC state and resident in another and this is all happening without clear EEC wide legislation to regulate it.
The issue is far bigger than Ryanair and as long as there is a conflict in the legislation between EEC states company's and individual's are quit at liberty to use the legislation of the EEC state that best meets their needs, to put it simply what may be unlawful in Italy could be within the law in Ireland and so they would choose to be taxed in Ireland leaving the Italian govement with a leagal problem that is heading in the direction of the very leagal foundation of the EEC if they decide to act against the company or individual.
Until all the EEC states get a common income and social tax system in place this problem will continue and I don't see the EEC rushing to fix anything, after all the new Social tax directive has a ten year phase in period.
Last edited by A and C; 24th October 2012 at 11:20.