EU Urges Tax Measures to Facilitate Small Business Successions

The European Commission recommended Tuesday that EU governments use tax incentives to facilitate the transfer of small and medium-sized businesses, in a push to remove fiscal barriers and ensure the survival of viable companies.

The recommendation, which isn’t binding, urged countries to refrain from applying different tax treatment depending on whether a business is transferred through a family succession, employee buyout, management buyout, or other structure, in order to ensure neutrality.

Effective tax measures could be particularly important in family transfers by ensuring that “inheritance or gift taxes do not endanger the survival of the business,” the commission ...