130 Amendments of Sven GIEGOLD related to 2018/0114(COD)
Amendment 97 #
Proposal for a directive
Recital 1
Recital 1
(1) The Directive (EU) 2017/1132 of the European Parliament and of the Council41 regulates cross-border mergers of limited liability companies. These rules represent a significant milestone in improving the functioning of the Single Market for companies and firms and to exercise the freedom of establishment and provide minimum protection for a series of affected stakeholders. However, evaluation of these rules shows that there is a need for modifications in cross-border merger rules. Furthermore, it is appropriate to provide for rules regulating cross-border conversions and divisions. _________________ 41 Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law (codification) (OJ L 169, 30.6.2017, p. 46).
Amendment 98 #
Proposal for a directive
Recital 2
Recital 2
(2) Freedom of establishment is one of the fundamental principles of Union law. Under the second paragraph of Article 49 of the Treaty on the Functioning of the European Union (‘TFEU’), when read in conjunction with Article 54 of the TFEU, the freedom of establishment for companies or firms includes, inter alia, the right to form and manage such companies or firms under the conditions laid down by the legislation of the Member State of establishment. This has been extensively interpreted by the Court of Justice of the European Union as encompassing the right of a company or firm formed in accordance with the legislation of a Member State to convert itself into a company or firm governed by the law of another Member State, provided that the conditions laid down by the legislation of that other Member State are satisfied and, in particular, that the test adopted by the latter Member State to determine the connection of a company or firm to its national legal order is satisfied. Moreover, additional elements such as the existence of economic substance criteria are particularly important to take into account in order to avoid the misuse of this fundamental freedom for fraud purposes.
Amendment 99 #
Proposal for a directive
Recital 2 a (new)
Recital 2 a (new)
(2a) While competition in the single market and the freedom of establishment are key principles of the Union, the freedom of companies to move their registered office from one Member State to another is based on undesired system competition between Member States fuelled by an unlevel playing field with different national provisions in social and fiscal policies. Abusive conversions, mergers or divisions constituting artificial arrangements or social dumping, but also reducing fiscal obligations or undercutting social rights of employees are therefore to be avoided in order to respect Treaty principles and European values. The case law of the European Court of Justice regarding a very far- reaching right to cross-border conversions is regrettable, as the possibility for firms to move their registered office without moving core activities has contributed to incomprehension and anti-European sentiments by employees and other stakeholders as regards this problematic form of competition.
Amendment 100 #
Proposal for a directive
Recital 2 b (new)
Recital 2 b (new)
(2b) Moving towards a common and consolidated corporate tax system at the Union level and ensuring minimum common social standards in all Member States should be a pre-condition for common rules on company mobility, to allow for fair competition and a level playing field that does not put any Member State or stakeholder at a disadvantage.
Amendment 101 #
Proposal for a directive
Recital 3
Recital 3
(3) In the absence of harmonisation of Union law, the definition of the connecting factor that determines the national law applicable to a company or firm falls, in accordance with Article 54 of the TFEU, within the competence of each Member State to so define. Article 54 of the TFEU places the factor of the registered office, the central administration and the principal place of business of a company or firm at the same degree of connection. Therefore, as clarified in case-law,42 where the Member State of new establishment, namely the destination Member State, requires only the transfer of the registered office as a connecting factor for the existenceGiven the contradictions arising from the freedom of establishment and the absence of a level playing field in the form of a company under its national legislation, the fact that only the registered office (and not the central administration or prinmon coherent social and fiscal rules between Member States, it is crucipal place of business) is transferred does not as such exclude the applicability of the freedom of establishment under Article 49 of to strike a balance between companies’ right to converge, merge and divide and other TFEU. The choice of the specific form of company in creaty principles. Cross-border mergers, conversions and divisions or the choice of a Member State of establishment are inherent in the exercise of the freedom of establishment guaranteed by the TFEU as part of a Single Market. _________________ 42Judgment of the Court of Justice of 25 October 2017, Polbud – Wykonawstwo, C- 106/16, ECLI:EU:C:2017:804, paragraph 29should be conditioned to the company moving its registered office together with its head office in order to carry out a substantial part of its economic activity in the Member State of destination.
Amendment 102 #
Proposal for a directive
Recital 4
Recital 4
(4) These developments in the case-law have opened up new opportunities for companies and firms in the Single Market in order to foster economic growth, effective competition and productivity. At the same time, the objective of a Single Market without internal borders for companies must also be reconciled with other objectives of European integration such as social protection (in particular the protection of workers), the protection of creditors and the protection of shareholders, as well as the fight against attacks on financial interests of the Union via for example money laundering and tax evasion. Similarly, the Union committed to respect the EU Charter of Fundamental Rights. The freedom of establishment shall in no way undermine other values and principles guaranteed by the TFEU such as the promotion of a high level of employment and the guarantee of adequate social protection (Article 9), improved living and working conditions and dialogue between management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion (Article 151) or countering fraud and any other illegal activities affecting the financial interests of the Union (Article 310). Such objectives, in the absence of harmonised rules specifically regarding cross-border conversions, are pursued by Member States through a number of multifarious legal provisions and administrative practices. As a result, whereas companies are already able to merge cross-border, they experience a number of legal and practical difficulties when wishing to perform a cross-border conversion. Moreover, the national legislation of many Member States provides for the procedure of domestic conversions without offering an equivalent procedure for converting cross-border.
Amendment 104 #
Proposal for a directive
Recital 6
Recital 6
(6) It is appropriate therefore to provide procedural and substantive rules on cross-border conversions which would contribute to the abolition of restrictions on freedom of establishment and provide at the same time adequate and proportionatethe necessary protection for stakeholders such as employees, creditors and minority shareholders.
Amendment 105 #
Proposal for a directive
Recital 6 a (new)
Recital 6 a (new)
(6a) The current fragmentation of legal frameworks in the Union leads to legal uncertainty and opportunities for abuses related to tax and social obligations or legal or contractual rights of employees, members and creditors. It is therefore important for competent authorities to check whether cross-border conversions, mergers and divisions are not used to create artificial arrangements. For the purpose of this Directive, an artificial arrangement can be understood either as unduly prejudicing the legal or contractual rights of employees, members and creditors or as defeating the object, spirit and purpose of tax provisions that would otherwise apply, regardless of the intentions of the taxpayers. For the assessment of an artificial arrangement for tax purposes, competent authorities in the Member States shall take into account at least a number of factors laid down in Commission’s Recommendation of 6 December 2012 (2012/772/EU) on “aggressive tax planning”. Competent authorities shall assess the existence of artificial arrangements by reference to their economic substance.
Amendment 107 #
Proposal for a directive
Recital 7
Recital 7
(7) The right to convert an existing company formed in a Member State into a company governed by another Member State may in certain circumstances be used for abusive purposes such as for the circumvention of labour standards, social security payments, tax obligations, creditors', minority shareholders' rights or rules on employees participation. In order to combat such possible abuses, a general principle of Union law, Member States are required to ensure that companies do not use the cross-border conversion procedure in order to create artificial arrangements aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In so far as it constitutes a derogation from a fundamental freedom, tThe fight against abuses must be interpreted strictly and be based on an individual assessment of all relevant circumstances. A common procedural and substantive framework which describes the margin of discretion and allows for the diversity of approach by Member States whilst at the same time settingto set out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with Union law should be laid down.
Amendment 110 #
Proposal for a directive
Recital 9
Recital 9
(9) Given the complexity of cross- border conversions and the multitude of the interests concerned, it is appropriate to provide for an ex-ante control in order to create legal certainty. To that effect, a structured and multi-layered procedure should be set out whereby the competent authorities of both the departure and the destination Member State ensure that a decision on the approval of a cross-border conversion is taken in a fair, objective and non-discriminatory manner on the basis of all relevant elements and by taking into account all legitimate public interests, in particular, the protection of employees, members and creditors. Procedures should also be in place for situations where additional information is available after the conversion but question whether the conversion has been done for abusive purposes.
Amendment 111 #
Proposal for a directive
Recital 10
Recital 10
(10) To allow all stakeholders' legitimate interests to be taken into account in the procedures governing a cross-border conversion, the company should disclose the draft terms of the cross- border conversion containing the most important information about the proposed cross- border conversion, including the envisaged new company form, and the rationale behind the conversion; the instrument of constitution and the proposed timetable for the conversion. Members, creditors and employees of the company carrying out the cross-border conversion should be notified in orderso that they can submit comments with regard to the proposed conversion. Such comments should be made public.
Amendment 113 #
(12) In order to provide information to its employees, the company carrying out the cross-border conversion should prepare a report explaining the implications of the proposed cross-border conversion for employees. The report should explain in particular the implications of the proposed cross-border conversion on the safeguarding of the jobs of the employees, whether there would be any material change in the employment relationships and the locations of the companies’ places of business and how each of these factors would relate to any subsidiaries of the company. This requirement should not however apply where the only employees of the company are in its administrative organ. The provision of the report should be without prejudice to the applicable information and consultation proceedings instituted at national level following the implementation of Directive 2002/14/EC of the European Parliament and of the Council43 or Directive 2009/38/EC of the European Parliament and of the Council44 . _________________ 43 Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community (OJ L 80, 23.3.2002, p. 29). 44 Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast) (OJ L 122, 16.5.2009, p. 28).
Amendment 115 #
Proposal for a directive
Recital 12 a (new)
Recital 12 a (new)
(12a) Companies willing to make full use of the benefits of the internal market through cross-border conversions shall submit in return to an adequate level of transparency and good corporate governance. Public Country by Country Reporting is an efficient and appropriate tool to increase transparency of multinational enterprises activities and to enable the public to assess their impact on the real economy. It will also improve shareholders ability to properly evaluate the risks taken by companies, lead to investment strategies based on accurate information and enhance decision-makers possibility to assess the efficiency and the impact of national legislations. Therefore, a set of financial information shall be published ahead of the cross-border operation ahead of its execution.
Amendment 119 #
Proposal for a directive
Recital 13
Recital 13
(13) In order to assess the accuracy of the information contained in the draft terms of conversion and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed conversion constitutes an artificial arrangement, an independent expert report should be required to be prepared in order to assess the proposed cross-border conversion. In order to secure the independence of the expert, the expert should be appointed by the competent authority, following an application by the companythe competent authority in the departure Member State shall prepare a report in order to assess the proposed cross-border conversion. In this context, the expert report should present all relevant information to enable the competent authority in the departure Member State to take an informed decision as to whether or not to issue the pre- conversion certificate. To this end, the expertcompetent authority should always organise a meeting with representatives of employees and should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required. The expertcompetent authority should use information, in particular net turnover and profit or loss, number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with Union law and the law of Member States. However, in order to protect any confidential information, including business secrets of the company, such information should not form part of the expertcompetent authority’s final report, which itself wshould be publically available.
Amendment 121 #
Proposal for a directive
Recital 14
Recital 14
(14) With a view to avoiding disproportionate costs and burdens for smaller companies carrying out the cross- border conversion, micro and small enterprises, as defined in the Commission Recommendation 2003/361/EC45 , ,should be exempted from the requirement to produce an independent expert reportobtain an assessment by the competent authority. However, these companies can resort to an independent expert reporsuch assessment to prevent litigation costs with creditors. _________________ 45 Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium- sized enterprises (OJ L 124, 20.5.2003, p. 36).
Amendment 122 #
Proposal for a directive
Recital 15
Recital 15
(15) On the basis of the draft terms of conversion and the reports, the general meeting of the members of the company should decide on whether or not to approve those draft terms. It is important that the majority requirement for such a vote should be sufficiently high in order to ensure that the decision to convert is a collective one. In addition, members should also have the right to vote on any arrangements concerning employee participation, if they have reserved that right during the general meeting.
Amendment 126 #
Proposal for a directive
Recital 18
Recital 18
(18) In order to guarantee the appropriate protection of creditors in cases where they are not satisfied with the protection offered by the company in the draft terms of the cross-border conversion, creditors may apply to the competent judicial or administrative authority of the departure Member State for the adequate the safeguards. In order to facilitate the assessment of prejudice, certain presumptions should be laid down whereby creditors would be deemed not to be prejudiced by a cross-border conversion, where the risk of loss to a creditor is remote. A presumption should arise where an independent expert report concludes that there is no reasonable likelihood that the creditors would be prejudiced or where creditors are offered a right to payment against the converted company or against a third party guarantee of equivalent value to the creditor's original claim and which can be brought in the same jurisdiction as the original claim. The creditor protection provided for in this Directive should be without prejudice to national laws of the Member State of departure concerning payment to public bodies, including taxation or social security contributions.
Amendment 127 #
Proposal for a directive
Recital 19
Recital 19
(19) In order to ensure that employee participation is not unduly prejudiced as a result of the cross-border conversion, where the company carrying out the cross- border conversion is operating under an employee participation system in the departure Member State, the company should be obliged to take a legal form allowing for the exercise of such equivalent participation, including through the presence of representatives of the employees in the appropriate management or supervisory organ of the company in the destination Member State. Moreover, in such a case, a bona fide negotiation between the company and its employees should take place in a timely manner ahead of the conversion, along the lines of the procedure provided for in Directive 2001/86/EC, with a view to finding an amicable solution reconciling the right of the company to carry out a cross-border conversion with the employees' rights of participation. As a result of those negotiations, either a bespoke and agreed solution or, in the absence of an agreement, the application of standard rules as set out in the Annex to Directive 2001/86/EC should apply, mutatis mutandis. In order to protect either the agreed solution or the application of those standard rules, the company should not be able to remove the participation rights through carrying out subsequent domestic or cross-border conversion, merger or division within threen years.
Amendment 131 #
Proposal for a directive
Recital 20
Recital 20
(20) In order to prevent the circumvention of employee participation rights by means of a cross-border conversion, the company carrying out a conversion which is registered in the Member State which provides for the employee participation rights, should not be able to perform a cross-border conversion without first entering into negotiations with its employees or their representatives when the average number of employees employed by that company is at least equivalent to four fifths of the national threshold for triggering such employee participation.
Amendment 132 #
Proposal for a directive
Recital 21
Recital 21
(21) To ensure a proper allocation of tasks among Member States and an efficient and effective ex-ante control of cross-border conversions, both the departure and the destination Member States should designate the appropriate competent authorities. In particular, the competent authorities of the departure Member States should have the power to issue a pre-conversion certificate without which the competent authorities in the destination Member State should not be able to complete the cross-border conversion procedure. A list of national competent authorities in the Member States shall be prepared and publish by the Commission. Member States’ competent authorities are expected to collaborate together in cases of cross- border conversions.
Amendment 134 #
Proposal for a directive
Recital 22
Recital 22
(22) The issue of the pre-conversion certificate by the departure Member State should be scrutinised to ensure the legality of the cross-border conversion of the company and the lack of abuses such as the circumvention of labour standards, social security payments, tax obligations, creditors', minority shareholders' rights or rules on employees participation. The competent authority of the departure Member State should decide on the issue of the pre-conversion certificate within onthree months of the application by the company, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or unduly prejudicing the legal or contractual rights of employees, creditors or members. In such a case, the competent authority should carry out an in-depth assessment. However, this in-depth assessment should not be carried out systematically, but it should be conducted on a case-by-case basis, where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within twofive months of informing the company that the in-depth assessment will be carried out. The assessment by the departure Member States, once final, shall be shared with the destination Member State’s competent authority.
Amendment 136 #
Proposal for a directive
Recital 23
Recital 23
(23) After having received a pre- conversion certificate, and after verifying that the incorporation requirements in the destination Member State are fulfilled, the competent authorities of the destination Member State should register the company in the business register of that Member State. The destination Member States should also verify the ultimate beneficial owner(s) of the converted company, based on information received. Only after this registration should the competent authority of the departure Member State strike the company off its own register. It should not be possible for the competent authority of the destination Member State to challenge the accuracy of the information provided by the pre- conversion certificate based on substantiated proof of attempt of fraud, which shall be shared with the Member State of origin. As a consequence of the cross-border conversion, the converted company should retain its legal personality, its assets and liabilities and all rights and obligations, including rights and obligations arising from contracts, acts or omissions.
Amendment 139 #
Proposal for a directive
Recital 28
Recital 28
(28) In order to further enhance the existing cross-border merger procedure, it is necessary to simplify those merger rules, where appropriate, whilst at the same time ensuring that stakeholders, and in particular employees, are adequately protected. Therefore, the existing cross- border merger rules should be modified in order to oblige the management or administrative organs of the merging companies to prepare separate reports detailing the legal and economic aspects of the cross-border merger for both members and for employees. The obligation on the management or administrative organ of the company to prepare the report for the members may however be waived, where those members are already informed about legal and economic aspects of the proposed merger. However, the report prepared for employees may only be waived where as well as the rationale for the cross-border merger for bothe merging companies and their subsidiaries do not have any employees other than those who form part of the management or administrative organmbers and for employees.
Amendment 142 #
Proposal for a directive
Recital 29
Recital 29
(29) Furthermore, in order to enhance the protection afforded to the employees of the merging company or companies, employees or their representatives mayshall provide their opinion on the company report setting out the implications of the cross-border merger for them. The provision of the report should be without prejudice to the applicable information and consultation proceedings instituted at national level following the implementation of Council Directive 2001/23/EC48 , Directive 2002/14/EC or Directive 2009/38/EC. _________________ 48 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (OJ L 82, 22.3.2001, p. 16).
Amendment 143 #
Proposal for a directive
Recital 29 a (new)
Recital 29 a (new)
(29a) Companies willing to make full use of the benefits of the internal market through cross-border mergers shall submit in return to an adequate level of transparency and good corporate governance. Public Country by Country Reporting is an efficient and appropriate tool to increase transparency of multinational enterprises activities and to enable the public to assess their impact on the real economy. It will also improve shareholders ability to properly evaluate the risks taken by companies, lead to investment strategies based on accurate information and enhance decision-makers possibility to assess the efficiency and the impact of national legislations. Therefore, a set of financial information shall be published ahead of the cross-border merger ahead of its execution.
Amendment 145 #
Proposal for a directive
Recital 30 a (new)
Recital 30 a (new)
(30a) In order to assess the accuracy of the information contained in the draft terms of merger and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed merger constitutes an artificial arrangement, the competent authority in the departure Member State shall prepare a report in order to assess the proposed cross-border merger. In this context, the report should present all relevant information to take an informed decision as to whether or not to issue the pre-conversion certificate. To this end, the competent authority should always organise a meeting with representatives of employees and should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required. The competent authority should use information, in particular net turnover and profit or loss, number of employees and the composition of balance sheet collected by the companies in view of the preparation of financial statements in accordance with Union law and the law of Member States. However, in order to protect any confidential information such information should not form part of the competent authority’s final report which itself would be publically available.
Amendment 146 #
Proposal for a directive
Recital 30 b (new)
Recital 30 b (new)
(30b) With a view to avoiding disproportionate costs and burdens for smaller companies carrying out the cross- border merger, micro and small enterprises, as defined in the Commission Recommendation 2003/361/EC, should be exempted from the requirement to obtain an assessment by the competent authority. However, these companies can resort to such assessment to prevent litigation costs with creditors.
Amendment 147 #
Proposal for a directive
Recital 31
Recital 31
(31) The lack of harmonisation of safeguards for members, employees or creditors has been identified as an obstacle for cross-border mergers by different stakeholders. Members, employees and creditors should be offered the same level of protection regardless of the Member States in which the merging companies are situated. This is without prejudice to the Member States’ rules on protecting creditors, employees or shareholders which are outside the scope of the harmonised measures, such as transparency requirements.
Amendment 150 #
Proposal for a directive
Recital 35
Recital 35
(35) In order to guarantee the appropriate protection of creditors in cases where they are not satisfied with the protection offered by the company in the common draft terms of the cross-border merger, creditors who are prejudiced by the cross-border merger may apply to the competent administrative or judicial authority of each Member State of the merging companies for the safeguards they consider adequate. In order to facilitate the assessment of prejudice, certain presumptions should be laid down whereby creditors would be deemed not to be prejudiced by a cross-border merger, where the risk of loss to a creditor is remote. A presumption should arise where an independent expert concludes that there is no reasonable likelihood that the creditors would be prejudiced or where creditors are offered a right to payment against the merged company or against a third party guarantee of equivalent value to the creditor's original claim and which can be brought in the same jurisdiction as the original claim.
Amendment 157 #
Proposal for a directive
Recital 40
Recital 40
(40) The right of companies to carry out a cross-border division may in certain circumstances be used for abusive purposes such as for the circumvention of labour standards, social security payments, tax obligations, creditors' or members' rights or rules on employees participation. In order to combat such abuses, as a general principle of Union law, Member States are required to ensure that companies do not use the cross-border division procedure in order to create artificial arrangements aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In so far as it constitutes a derogation from a fundamental freedom, the fight against abuses must be interpreted strictly andThe fight against abuses must be based on an individual assessment of all relevant circumstances. A common procedural and substantive framework which describes the margin of discretion and allows for the diversity of approaches by Member States whilst at the same time settingto set out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with Union law should be laid down.
Amendment 161 #
Proposal for a directive
Recital 42
Recital 42
(42) To allow all stakeholders' legitimate interests to be taken into account, the company being divided should disclose the draft terms of the division containing the most important information aboutinformation about the rationale for the cross-border division, the proposed cross-border division, including the envisaged the exchange ratio of securities or shares, the instruments of constitution of the recipient companies and the proposed timetable for the cross-border division. Members, creditors and employees of the company carrying out the cross-border division should be notified that they can submit comments with regard to the division. That report and comments received should be publicly available.
Amendment 165 #
Proposal for a directive
Recital 44
Recital 44
(44) In order to provide information to its employees, the company being divided should prepare a report explaining the implications of the proposed cross-border division for employees. The report should explain in particular the implications of the proposed cross-border division on the safeguarding of the jobs of the employees, whether there would be any material change in the conditions of employment and the locations of the companies’ places of business, and how each of these factors would relate to any subsidiaries of the company. The provision of the report should be without prejudice to the applicable information and consultation proceedings instituted at national level following the implementation of Directives 2001/23/EC, 2002/14/EC or 2009/38/EC. Employees of the company carrying out the cross-border division should be notified well in advance so that they can submit comments with regard to the proposed division.
Amendment 167 #
Proposal for a directive
Recital 44 a (new)
Recital 44 a (new)
(44a) Companies willing to make full use of the benefits of the internal market through cross-border divisions shall submit in return to an adequate level of transparency and good corporate governance. Public Country by Country Reporting is an efficient and appropriate tool to increase transparency of multinational enterprises activities and to enable the public to assess their impact on the real economy. It will also improve shareholders ability to properly evaluate the risks taken by companies, lead to investment strategies based on accurate information and enhance decision-makers possibility to assess the efficiency and the impact of national legislations. Therefore, a set of financial information shall be published ahead of the cross-border operation ahead of its execution.
Amendment 170 #
Proposal for a directive
Recital 45
Recital 45
(45) In order to ensure the accuracy of the information contained in the draft terms of division and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed division constitutes an artificial arrangement which could not be authorised, an independent expert report to assess the division plan should be required to be prepared. In order to secure the independence of the expert, the expert should be appointed by the competent authority, following an application by the compthe competent authority of the Member State of the company being divided shall produce a report to assess the division plany. In this context, the expert report should present all relevant information to enable the competent authority of the Member State of the company being divided to take an informed decision as to whether or not to issue the pre-division certificate. To this end, the expertcompetent authority should always organise a meeting with representatives of employees and should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required. The expertcompetent authority should use information, in particular net turnover and profit or loss, number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with Union law and the law of Member States. However, in order to protect any confidential information, including business secrets of the company, such information should not form part of the expert’s final report, which itself wshould be publically available.
Amendment 178 #
Proposal for a directive
Recital 50
Recital 50
(50) In order to guarantee the appropriate protection of creditors in cases where they are not satisfied with the protection offered by the company in the draft terms of the cross-border division, creditors who are prejudiced by the cross- border division may apply to the competent judicial or administrative authority of the Member State of the company being divided for the safeguards they consider adequate. In order to facilitate the assessment of prejudice, certain presumptions should be laid down whereby creditors would be deemed not to be prejudiced by a cross-border division where the risk of loss to a creditor is remote. A presumption should arise where an independent expert report concludes that there is no reasonable likelihood that the creditors would be prejudiced or where creditors are offered a right to payment against the company resulting from the division or against a third party guarantee of equivalent value to the creditor's original claim and which can be brought in the same jurisdiction jurisdiction as the original claim. The creditor protection provided for in this Directive should be without prejudice to national laws of the Member State of the company being divided concerning payment to public bodies, including taxation or social security contributions.
Amendment 182 #
Proposal for a directive
Recital 52
Recital 52
(52) The issue of the pre-division certificate by the Member State of the company being divided should be scrutinised to ensure the legality of the cross-border division. The competent authority should decide whether to issue a pre-division certificate within onthree months of the application by the company has been submitted, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In such a case, the competent authority should carry out an in- depth assessment. However, this in-depth assessment should not be carried out systematically but it should be conducted on a case-by-case basis where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within twofive months informing the company that the in-depth assessment will be carried out.
Amendment 184 #
Proposal for a directive
Recital 53
Recital 53
(53) After having received a pre- division certificate, and after verifying that the incorporation requirements of the Member State of the recipient company or companies are fulfilled, the authorities of the Member States of the recipient companies should register the companies in the business registers of that Member State. Authorities of the Member States of the recipient companies should also verify the ultimate beneficial owners of these companies, based on information received. Only after this registration should the competent authority of the Member State of the company being divided strike the company off its own register. The accuracy of the information provided by the pre- division certificate cannot be challenged by the competent authorities of the Member States of the recipient companies in case of evidence leading to strong suspicion of fraud, which should be shared with the Member State of origin.
Amendment 187 #
Proposal for a directive
Recital 55
Recital 55
(55) In order to ensure that employee participation is not unduly prejudiced as a result of the cross-border division where the company carrying out the cross-border division is operating under an employee participation system, the companies resulting from the division should be obliged to take a legal form allowing for the exercise of equivalent participation, including through the presence of representatives of the employees in the appropriate management or supervisory organs of the companies. Moreover, in such a case, a bona fide negotiation between the company and its employees should take place, along the lines of the procedure provided for in Directive 2001/86/EC, with a view to finding an amicable solution reconciling the right of the company to carry out a cross-border division with the employees'' rights of participation. As a result of those negotiations, either a bespoke and agreed solution or, in the absence of an agreement, the application of standard rules as set out in the Annex to Directive 2001/86/EC should apply mutatis mutandis. In order to protect either the agreed solution or the application of those standard rules, the company should not be able to remove the participation rights through carrying out subsequent domestic or cross-border conversions, mergers or divisions within 3ten years.
Amendment 190 #
Proposal for a directive
Recital 58
Recital 58
(58) The provisions of this Directive do not affect the legal or administrative provisions, including the enforcement of tax rules in cross-border conversions, mergers and divisions, of national law relating to the taxes of Member States, or its territorial and administrative subdivisions. Departure Member States shall for example have the right to impose taxes on hidden reserves of departing companies that have not yet been subject to taxation in the departing Member State, in accordance with the case law of the European Court of Justice.
Amendment 193 #
Proposal for a directive
Recital 63
Recital 63
(63) The Commission should carry out an evaluation of this Directive. Pursuant to paragraph 22 of the Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making of 13 April 201652 that evaluation should be based on the five criteria of efficiency, effectiveness, relevance, coherence and value added and should provide the basis for impact assessments of possible further measures. _________________ 52This evaluation should pay particular attention to the impact of this Directive in detecting and preventing cases of cross- border conversions, mergers or divisions representing artificial arrangements. _________________ 52 OJ L123, 12.5. 2016, p. 1. OJ L123, 12.5. 2016, p. 1.
Amendment 199 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 b – paragraph 1 – point 6 a (new)
Article 86 b – paragraph 1 – point 6 a (new)
(6a) 'an artificial arrangement' means any transaction, scheme, action, operation or agreement or a series of these put in place to circumvent companies’ obligations related to legal or contractual rights of employees, creditors or members, including related to employees’ participation or obligations related to taxation or social security, and which is considered to lack genuine economic substance, regardless of the intentions of the taxpayer;
Amendment 200 #
Proposal for a directive
Article 1 – paragraph 1 – point 3 Directive (EU) No 2017/1132
Article 1 – paragraph 1 – point 3 Directive (EU) No 2017/1132
(6b) 'economic substance' means factual criteria, which can be used to define the taxable presence of an undertaking, such as the existence of human and physical resources specific to the entity, its management autonomy, its legal reality, the revenues it generates and, where appropriate, the nature of its assets;
Amendment 203 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 c – paragraph 2 – point a
Article 86 c – paragraph 2 – point a
(a) proceedings have been instituted for the winding-up, liquidation, or insolvency of that company, or infringement of workers’ rights;
Amendment 207 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 c – paragraph 2 – point e a (new)
Article 86 c – paragraph 2 – point e a (new)
(ea) the company is under investigation or has been convicted in the last 3years for social or tax fraud, tax evasion, tax avoidance or money laundering or any other financial crime;
Amendment 213 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 c – paragraph 3
Article 86 c – paragraph 3
3. Member States shall ensure that the competent authority of the departure Member State shall not authorise the cross- border conversion where it determines, after an examination of the specific case and having regard to all relevant facts and circumstances, that it constitutes an artificial arrangement or has strong suspicions that it constitutes an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or minority members.
Amendment 216 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 c – paragraph 4 a (new)
Article 86 c – paragraph 4 a (new)
4a. This Directive is without prejudice of the enforcement of tax rules in national law, including the possibility for the departure Member States to impose a tax on hidden reserves of the converting company before the conversion takes effect, in accordance with the jurisprudence of the European Court of Justice.
Amendment 217 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 c – paragraph 4 b (new)
Article 86 c – paragraph 4 b (new)
4b. Departure Member States may tax unrealised capital gains at the time of the cross-border conversion of a company. The company may then choose between immediate payment of the amount of tax and a deferred payment of the amount of tax, together with interest in accordance with the applicable national legislation. If the company opts for the latter, the departure Member State may request the provision of a bank guarantee.
Amendment 218 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 d – paragraph 1 – points j a to j k (new)
Article 86 d – paragraph 1 – points j a to j k (new)
(ja) the name of the ultimate undertaking and, where applicable, the list of all its subsidiaries, a brief description of the nature of their activities and their respective geographical location; (jb) the number of employees on a full- time equivalent basis; (jc) fixed assets other than cash or cash equivalents; (jd) the amount of the net turnover, including a distinction between the turnover made with related parties and the turnover made with unrelated parties; (je) the amount of profit or loss before income tax; (jf) the amount of income tax accrued (current year) which is the current tax expense recognised on taxable profits or losses of the financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction; (jg) the amount of income tax paid which is the amount of income tax paid during the relevant financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction; (jh) the amount of accumulated earnings; (ji) stated capital; (jj) details of public subsidies received and any donations made to politicians, political organisations or political foundations; (jk) whether undertakings, subsidiaries or branches benefit from preferential tax treatment, from a patent box or equivalent regimes.
Amendment 220 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 d – paragraph 2 a (new)
Article 86 d – paragraph 2 a (new)
2a. Members, employees or creditors shall have the possibility to comment on these draft terms. The comments shall be included in the final report and be made public.
Amendment 223 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 e – paragraph 2 – point a
Article 86 e – paragraph 2 – point a
(a) the rationale for the operation and implications of the cross-border conversion on the future business of the company and on the management's strategic plan;
Amendment 229 #
3. The report referred to in paragraph 1 of this Article, shall be made available, at least electronically, to the members not less than two months before the date of the general meeting referred to in Article 86i. That report shall also be made similarly availableavailable not less than two months before the date of the general meeting to the representatives of the employees of the company carrying out the cross-border conversion or, where there are no such representatives, to the employees themselves.
Amendment 232 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 e – paragraph 4
Article 86 e – paragraph 4
Amendment 238 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 f – paragraph 2 – point a
Article 86 f – paragraph 2 – point a
(a) the rationale for the operation and implications of the cross-border conversion on the future business of the company and on the management's strategic plan;
Amendment 243 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 f – paragraph 5
Article 86 f – paragraph 5
Amendment 244 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 g – title
Article 86 g – title
Article 86g Examination by an independent expertthe competent authority
Amendment 247 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 g – paragraph 1 – subparagraph 1
Article 86 g – paragraph 1 – subparagraph 1
Member States shall ensure that the company carrying out the cross-border conversion applies not less than two months before the date of the general meeting referred to in Article 86i to the competent authority designated in accordance with Article 86m(1), to appoint an expert to. The competent authority shall examine and assess the draft terms of the cross-border conversion and the reports referred to in Articles 86e and 86f, subject to the proviso set out in paragraph 6 of this Article.
Amendment 248 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 g – paragraph 1 – subparagraph 2 – introductory part
Article 86 g – paragraph 1 – subparagraph 2 – introductory part
The application forto the appointment of an expertcompetent authority shall be accompanied by the following:
Amendment 250 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 g – paragraph 2
Article 86 g – paragraph 2
2. The competent authority shall appoint an independent expert within five working days from the application referred to in paragraph 1 and the receipt of the draft terms and reports. The expert shall be independent from the company carrying out the cross-border conversion and may be a natural or a legal person depending upon the law of the departure Member State. Member States shall take into account, in assessing the independence of the expert, the framework established in Articles 22 and 22b of Directive 2006/43/ECstart working on the application referred to in paragraph 1 within 5 working days following the receipt of the draft terms and reports.
Amendment 254 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 g – paragraph 3 – introductory part
Article 86 g – paragraph 3 – introductory part
3. The expertcompetent authority shall draw up a written report providing at least:
Amendment 258 #
Proposal for a directive
Article 1 – paragraph 1 – point 3 Directive (EU) No 2017/1132
Article 1 – paragraph 1 – point 3 Directive (EU) No 2017/1132
(b) a description of all factual elements necessary for the competent authority, designated in accordance with Article 86m(1), to carry out an in-depth assessment to determine whether the intended cross-border conversion constitutes an artificial arrangement in accordance with Article 86n, including at a minimum the following: the characteristics of the establishment in the destination Member State, including the intent, the sector, the investment, the net turnover and profit or loss, number of employees, the composition of the balance sheet, the tax residence, the assets and their location, the habitual place of work of the employees and of specific groups of employees, the place where social contributions are due and the commercial risks assumed by the converted company in the destination Member State and the departure Member State.
Amendment 259 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 g – paragraph 3 a (new)
Article 86 g – paragraph 3 a (new)
3 a. The competent authority shall always organise a meeting with employees of the company prior to drawing up its written report.
Amendment 261 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 g – paragraph 4
Article 86 g – paragraph 4
4. Member States shall ensure that the independent expert shall be entitled toir competent authority obtain,s from the company carrying out the cross-border conversion, all relevant information and documents and tohat the competent authority carryies out all necessary investigations to verify all elements of the draft terms or management reports. The expertcompetent authority shall also be entitled to receive comments and opinions from the representatives of the employees of the company, or, where there are no such representatives, from the employees themselves and also from the creditors and members of the company.
Amendment 264 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 g – paragraph 5
Article 86 g – paragraph 5
5. Member States shall ensure that information submitted to the independent expert can only be used for the purpose of drafting their report and that confidential information, including business secrets, shall not be disclosed. Where appropriate, the expert may submit a separate document containing any such confidential information toshall be produced by the competent authority, designated in accordance with Article 86m(1) and that separate document shall only be made available to the company carrying out the cross-border conversion and not be disclosed to any other party.
Amendment 269 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 h – paragraph 1 – subparagraph 1 – point b
Article 86 h – paragraph 1 – subparagraph 1 – point b
(b) the independent expertcompetent authority of the departure Member State’s report referred to in Article 86g, where applicable;
Amendment 270 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 h – paragraph 3 – point d a (new)
Article 86 h – paragraph 3 – point d a (new)
(d a) Information on its ultimate beneficial owners before and after the cross-border conversion.
Amendment 273 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 h – paragraph 4 – subparagraph 2
Article 86 h – paragraph 4 – subparagraph 2
However, Member States may, in cases of genuine suspicion of fraud based on reasonable grounds, require a physical presence before a competent authority.
Amendment 288 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 k – paragraph 3 – point a
Article 86 k – paragraph 3 – point a
Amendment 300 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 m – paragraph 2 – subparagraph 1 – point b
Article 86 m – paragraph 2 – subparagraph 1 – point b
(b) the reports referred to in Articles 86e, 86f and 86g, as appropriatef;
Amendment 301 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 m – paragraph 2 – subparagraph 2
Article 86 m – paragraph 2 – subparagraph 2
Amendment 305 #
However, in cases of genuine suspicion of fraud based on reasonable grounds Member States may require a physical presence before a competent authority where relevant information and documents are required to be submitted.
Amendment 308 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 m – paragraph 4
Article 86 m – paragraph 4
4. In respect of compliance with the rules concerning employee participation as laid down in Article 86l, the departure Member State shall verify that the draft terms and reports of cross-border conversion, referred to in paragraph 2 of this Article, include information on the procedures by which the relevant arrangements are determined and on the possible options for such arrangements.
Amendment 311 #
7. Member States shall ensure that the assessment by the competent authority is carried out within onthree months of the date of receipt of the information concerning the approval of the conversion by the general meeting of the company. It shall have one of the following outcomes:
Amendment 316 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 n – paragraph 1 – subparagraph 1
Article 86 n – paragraph 1 – subparagraph 1
Member States shall ensure in order to assess whether the cross-border conversion constitutes an artificial arrangement within the meaning of Article 86c(3)this Directive, that the competent authority of the departure Member State carries out an in-depth assessment of all relevant facts and circumstances and shall take into account at a minimum the following: the characteristics of the establishment in the destination Member State, including the intent, the sector, the investment, the net turnover and profit or loss, number of employees, the composition of the balance sheet, the tax residence, the assets and their location, the habitual place of work of the employees and of specific groups of employees, the place where social contributions are due and the commercial risks assumed by the converted company in the destination Member State and the departure Member State.
Amendment 317 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 n – paragraph 2
Article 86 n – paragraph 2
2. Member States shall ensure that where the competent authority referred to in paragraph 1 decides to carry out an in- depth assessment, it is able to hear the company and all parties that have submitted observations pursuant Article 86h(1)(c) in accordance with national law. The competent authorities referred to in paragraph 1 may also hear any other interested third parties in accordance with national law. The competent authority shall take its final decision regarding the issue of the pre-conversion certificate within twofive months from the start of the in-depth assessment.
Amendment 323 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 p – paragraph 1 a (new)
Article 86 p – paragraph 1 a (new)
1 a. Competent authorities in the Member State of departure shall send the outcome of its assessment on the cross- border conversion to the competent authorities in the Member State of destination.
Amendment 326 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 p – paragraph 3 – subparagraph 2
Article 86 p – paragraph 3 – subparagraph 2
However, in cases of genuine suspicion of fraud based on reasonable grounds, Member States may require a physical presence before a competent authority of a Member State where relevant information and documents are required to be submitted.
Amendment 328 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 q – paragraph 2 – point d a (new)
Article 86 q – paragraph 2 – point d a (new)
(d a) information on its ultimate beneficial owners before and after the cross-border conversion in accordance with Directive 2015/849.
Amendment 333 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 t
Article 86 t
Amendment 334 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) No 2017/1132
Article 86 t
Article 86 t
Amendment 336 #
Proposal for a directive
Article 1 – paragraph 1 – point 3 Directive (EU) No 2017/1132
Article 1 – paragraph 1 – point 3 Directive (EU) No 2017/1132
A cross-border conversion which has taken effect in compliance with the procedures transposing this Directive may not be declared null and void. However, if during the year following the date on which the cross-border conversion takes effect, new information on this cross-border conversion are brought to the attention of the competent authorities alleging of genuine suspicion of fraud, the competent authorities shall proceed to a revised assessment of the facts of the case and can take effective, proportionate and dissuasive sanctions in cases of artificial arrangements.
Amendment 337 #
Proposal for a directive
Article 1 – paragraph 1 – point 4 – point b a (new)
Article 1 – paragraph 1 – point 4 – point b a (new)
Directive (EU) No 2017/1132
Article 119 – paragraph 1 – point 2 a (new)
Article 119 – paragraph 1 – point 2 a (new)
Amendment 338 #
Proposal for a directive
Article 1 – paragraph 1 – point 4 – point b (new)
Article 1 – paragraph 1 – point 4 – point b (new)
Directive (EU) No 2017/1132
Article 119 – paragraph 1 – point 2 b (new)
Article 119 – paragraph 1 – point 2 b (new)
(b b) in Article 119, the following new point (2 b) is added: "(2b) 'economic substance' means factual criteria, which can be used to define the taxable presence of an undertaking, such as the existence of human and physical resources specific to the entity, its management autonomy, its legal reality, the revenues it generates and, where appropriate, the nature of its assets;"
Amendment 341 #
Proposal for a directive
Article 1 – paragraph 1 – point 5
Article 1 – paragraph 1 – point 5
Directive (EU) No 2017/1132
Article 120 – paragraph 4 – point a
Article 120 – paragraph 4 – point a
(a) proceedings have been instituted for the winding-up, liquidation, or insolvency of that company or companies or infringement of workers’ rights;
Amendment 342 #
Proposal for a directive
Article 1 – paragraph 1 – point 5
Article 1 – paragraph 1 – point 5
Directive (EU) No 2017/1132
Article 120 – paragraph 4 – point e a (new)
Article 120 – paragraph 4 – point e a (new)
(e a) the company is under investigation or has been convicted in the last 3 years for social or tax fraud, tax evasion, tax avoidance or money laundering or any other financial crime;
Amendment 345 #
Proposal for a directive
Article 1 – paragraph 1 – point 7 – point b a (new)
Article 1 – paragraph 1 – point 7 – point b a (new)
Directive (EU) No 2017/1132
Article 122 – paragraph 1 – point b a (new)
Article 122 – paragraph 1 – point b a (new)
(b a) the name of the ultimate undertaking and, where applicable, the list of all its subsidiaries, a brief description of the nature of their activities and their respective geographical location; the number of employees on a full-time equivalent basis; fixed assets other than cash or cash equivalents; the amount of the net turnover, including a distinction between the turnover made with related parties and the turnover made with unrelated parties; the amount of profit or loss before income tax; the amount of income tax accrued (current year) which is the current tax expense recognised on taxable profits or losses of the financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction; the amount of income tax paid which is the amount of income tax paid during the relevant financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction; and the amount of accumulated earnings; stated capital; details of public subsidies received and any donations made to politicians, political organisations or political foundations; whether undertakings, subsidiaries or branches benefit from preferential tax treatment, from a patent box or equivalent regimes.
Amendment 346 #
Proposal for a directive
Article 1 – paragraph 1 – point 7 – point c a (new)
Article 1 – paragraph 1 – point 7 – point c a (new)
Directive (EU) No 2017/1132
Article 122 – paragraph 1 a (new)
Article 122 – paragraph 1 a (new)
(c a) the following paragraph is added: "1a. Members, employees or creditors shall have the possibility to comment on these draft terms. The comments shall be included in the final report and be made public."
Amendment 351 #
Proposal for a directive
Article 1 – paragraph 1 – point 9
Article 1 – paragraph 1 – point 9
Directive (EU) No 2017/1132
Article 123 – paragraph 4 – subparagraph 2
Article 123 – paragraph 4 – subparagraph 2
However, Member States may, in cases of genuine suspicion of fraud based on reasonable grounds, require a physical presence before a competent authority.
Amendment 361 #
Proposal for a directive
Article 1 – paragraph 1 – point 9
Article 1 – paragraph 1 – point 9
Directive (EU) No 2017/1132
Article 124 – paragraph 4
Article 124 – paragraph 4
Amendment 371 #
Proposal for a directive
Article 1 – paragraph 1 – point 11
Article 1 – paragraph 1 – point 11
Directive (EU) No 2017/1132
Article 125 – paragraph 1 – subparagraph 2
Article 125 – paragraph 1 – subparagraph 2
Amendment 373 #
Proposal for a directive
Article 1 – paragraph 1 – point 11 a (new)
Article 1 – paragraph 1 – point 11 a (new)
Directive (EU) No 2017/1132
Article 125
Article 125
Amendment 382 #
Proposal for a directive
Article 1 – paragraph 1 – point 13
Article 1 – paragraph 1 – point 13
Directive (EU) No 2017/1132
Article 126 b – paragraph 3 – point a
Article 126 b – paragraph 3 – point a
Amendment 391 #
Proposal for a directive
Article 1 – paragraph 1 – point 18 – point a
Article 1 – paragraph 1 – point 18 – point a
Directive (EU) No 2017/1132
Article 133 – paragraph 7
Article 133 – paragraph 7
7. Where the company resulting from the cross-border merger is operating under an employee participation system, that company shall be obliged to take measures to ensure that employees' participation rights are protected in the event of any subsequent cross-border or domestic mergers, divisions or conversions for a period of threen years after the cross-border merger has taken effect, by applying mutatis mutandis the rules laid down in paragraphs 1 to 6.;
Amendment 392 #
Proposal for a directive
Article 1 – paragraph 1 – point 19 Directive (EU) No 2017/1132
Article 1 – paragraph 1 – point 19 Directive (EU) No 2017/1132
Amendment 397 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
(1 a) 'an artificial arrangement' means any transaction, scheme, action, operation or agreement or a series of these put in place to circumvent companies’ obligations related to legal or contractual rights of employees, creditors or members, including related to employees’ participation or obligations related to taxation or social security, and which is considered to lack genuine economic substance, regardless of the intentions of the taxpayer;
Amendment 398 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 b – point 1 b (new)
Article 160 b – point 1 b (new)
(1 b) 'economic substance' means factual criteria, which can be used to define the taxable presence of an undertaking, such as the existence of human and physical resources specific to the entity, its management autonomy, its legal reality, the revenues it generates and, where appropriate, the nature of its assets;
Amendment 401 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 d – paragraph 2 – point a
Article 160 d – paragraph 2 – point a
(a) proceedings have been instituted for the winding-up, liquidation, or insolvency of that company or infringements of workers’ rights;
Amendment 404 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 d – paragraph 2 – point e a (new)
Article 160 d – paragraph 2 – point e a (new)
(e a) the company is under investigation or has been convicted in the last 3 years for social or tax fraud, tax evasion, tax avoidance or money laundering or any other financial crime;
Amendment 407 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 d – paragraph 3
Article 160 d – paragraph 3
3. The Member State of the company being divided shall ensure that the competent authority shall not authorise the division when it determines, after an examination of the specific case and having regard to all relevant facts and circumstances, that it constitutes an artificial arrangement or has strong suspicions that it constitutes an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members.
Amendment 409 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 d – paragraph 4 a (new)
Article 160 d – paragraph 4 a (new)
4 a. This Directive is without prejudice of the enforcement of tax rules in national law, including the possibility for the departure Member State to impose a tax on hidden reserves of the dividing company before the division takes effect, in accordance with the jurisprudence of the European Court of Justice.
Amendment 410 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 e – paragraph 1 – point r a (new)
Article 160 e – paragraph 1 – point r a (new)
Amendment 411 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 e – paragraph 4
Article 160 e – paragraph 4
4. In addition to the official languages of the Member States of the recipient companies and the one being divided, Member States shall allow the company to use a language customary in the sphere of international business and finance in order to draw up the draft terms of cross-border division and all other related documents. Member States shall specify which language will prevail in case of discrepancies among different linguistic versions of those documents. Members, employees or creditors shall have the possibility to comment on these draft terms. The comments shall be included in the final report and be made public.
Amendment 416 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 g – paragraph 2 – point a
Article 160 g – paragraph 2 – point a
(a) the rationale for the operation and implications of the cross-border division on the future business of the recipient companies and, in the case of a partial division, also of the company being divided and on the managements' strategic plan;
Amendment 423 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 g – paragraph 4
Article 160 g – paragraph 4
Amendment 429 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 h – paragraph 2 – point a
Article 160 h – paragraph 2 – point a
(a) the rationale of the operation and implications of the cross-border division on the future business of the recipient companies and, in the case of a partial division, also of the company being divided and on the management's strategic plan;
Amendment 430 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Amendment 431 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – title
Article 160 i – title
Article 160i Examination by an independent expertcompetent authorities
Amendment 433 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – paragraph 1 – subparagraph 1
Article 160 i – paragraph 1 – subparagraph 1
Member States shall ensure that the company being divided applies to the competent authority, designated in accordance with Article 160o(1), not less than two months before the date of the general meeting referred to in Article 160k, to appoint an expert to. The competent authority shall examine and assess the draft terms of cross-border division and the reports referred to in Articles 160g and 160h, subject to the proviso set out in paragraph 6 of this Article.
Amendment 434 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – paragraph 1 – subparagraph 2
Article 160 i – paragraph 1 – subparagraph 2
The application forto the appointment of an expertcompetent authority shall be accompanied by the following
Amendment 436 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – paragraph 2
Article 160 i – paragraph 2
2. The competent authority shall appoint an independent expert within five working days of the application referred to in paragraph 1 and the receipt of the draft terms and reports. The expert shall be independent from the company being divided and may be a natural or a legal person depending upon the law of the Member State concerned. Member States shall take into account, in assessing the independence of the expert, the framework established in Articles 22 and 22b of Directive 2006/43/ECstart working on the application referred to in paragraph 1 within five working days following the receipt of the draft terms and reports.
Amendment 438 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – paragraph 3 – introductory part
Article 160 i – paragraph 3 – introductory part
3. The expertcompetent authority shall draw up a written report providing at least:
Amendment 440 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – paragraph 3 – point f
Article 160 i – paragraph 3 – point f
(f) a description of all factual elements necessary for the competent authority designated in accordance with Article 160o(1), to carry out an in-depth assessment to determine whether the intended cross-border division constitutes an artificial arrangement in accordance with Article 160p, at a minimum the following: the characteristics of the establishments in the Member States concerned of the recipient companies, including the intent, the sector, the investment, the net turnover and profit or loss, number of employees, the composition of the balance sheet, the tax residence, the assets and their location, the habitual place of work of the employees and of specific groups of employees, the place where social contributions are due and the commercial risks assumed by the company being divided in the Member States of the recipient companies.
Amendment 441 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – point 3 a (new)
Article 160 i – point 3 a (new)
3 a. The competent authority shall always organise a meeting with employees of the company prior to drawing up its written report.
Amendment 442 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – paragraph 4
Article 160 i – paragraph 4
4. Member States shall ensure that the independent expertir competent authority shall be entitled to obtain from the company being divided all relevant information and documents and to carry out all necessary investigations to verify all elements of the draft terms or management reports. The independent expertcompetent authority shall also be entitled to receive comments and opinions from the representatives of the employees of the company, or, where there are no such representatives, employees themselves and also from the creditors and members of the company.
Amendment 444 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 i – paragraph 5
Article 160 i – paragraph 5
5. Member States shall ensure that information submitted to the independent expert can only be used for the purpose of drafting the report and that confidential information, including business secrets, shall not be disclosed. Where appropriate, the expert may submitcompetent authority may produce a separate document containing confidential information to the competent authority designated in accordance with Article 160o(1) and that separate document shall only be made available to the company being divided and not be disclosed to any third party.
Amendment 445 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 j – paragraph 1 – point b
Article 160 j – paragraph 1 – point b
(b) the independent expert reportreport from the competent authority referred to in Article 160i, where applicable;
Amendment 446 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 j – paragraph 1 – point c a (new)
Article 160 j – paragraph 1 – point c a (new)
(c a) Information on its ultimate beneficial owners before and after the cross-border division.
Amendment 449 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 j – paragraph 4 – subparagraph 2
Article 160 j – paragraph 4 – subparagraph 2
However, Member States may in cases of genuine suspicion of fraud based on reasonable grounds, require a physical presence before a competent authority.
Amendment 463 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 m – paragraph 3 – point a
Article 160 m – paragraph 3 – point a
Amendment 468 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 o – paragraph 2 – point b
Article 160 o – paragraph 2 – point b
(b) the reports referred to in Articles 160g, 160h and 160i, as appropriateh;
Amendment 469 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 o – paragraph 2 – subparagraph 2
Article 160 o – paragraph 2 – subparagraph 2
Amendment 474 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 o – paragraph 4
Article 160 o – paragraph 4
4. In respect of compliance with the rules concerning employee participation as laid down in Article 160n, the Member State of the company being divided shall verify that the draft terms and reports of cross-border division referred to in Article 160e include information on the procedures by which the relevant arrangements are determined and on the possible options for such arrangements.
Amendment 475 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 o – paragraph 7
Article 160 o – paragraph 7
7. Member States shall ensure that the assessment by the competent authority is carried out within onthree months of the receipt of the information concerning the approval of the cross-border division by the general meeting of the company. It shall have one of the following outcomes:
Amendment 478 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 p – paragraph 1 – subparagraph 1
Article 160 p – paragraph 1 – subparagraph 1
Member States shall ensure in order to assess whether the cross-border division constitutes an artificial arrangement within the meaning of Article 160d(3) of this Directive, the competent authority of the company being divided shall carry out an in-depth assessment of all relevant facts and circumstances and shall take into account at a minimum the following: the characteristics of the establishment in the Member States concerned, including the intent, the sector, the investment, the net turnover and profit or loss, number of employees, the composition of the balance sheet, the tax residence, the assets and their location, the habitual place of work of the employees and of specific groups of employees, the place where social contributions are due and the commercial risks assumed by the company being divided in the Member State of that company and Member States of recipient companies.
Amendment 481 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 r – paragraph 1 a (new)
Article 160 r – paragraph 1 a (new)
1 a. The competent authority in the Member State of departure shall send the outcome of its assessment on the cross- border division to the competent authorities in the Member State of destination.
Amendment 484 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 r – paragraph 3 – subparagraph 2
Article 160 r – paragraph 3 – subparagraph 2
However, in cases of genuine suspicion of fraud based on reasonable grounds, Member States may require a physical presence before a competent authority of a Member State where relevant information and documents are required be submitted.
Amendment 485 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 s – paragraph 2 – point d a (new)
Article 160 s – paragraph 2 – point d a (new)
(d a) Information on its ultimate beneficial owners before and after the cross-border conversion in accordance with Directive 2015/849.
Amendment 487 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 v
Article 160 v
Amendment 489 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 v
Article 160 v
Amendment 492 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) No 2017/1132
Article 160 v – paragraph 1 a (new)
Article 160 v – paragraph 1 a (new)
However, if during the year following the date on which the cross-border division takes effect, new information on this cross-border division are brought to the attention of the competent authorities alleging of genuine suspicion of fraud, the competent authorities shall proceed to a revised assessment of the facts of the case and can take effective, proportionate and dissuasive sanctions in cases of artificial arrangements.
Amendment 494 #
Proposal for a directive
Article 3 – paragraph 1
Article 3 – paragraph 1
1. The Commission shall, no later than fivthree years after [OP please insert the date of the end of the transposition period of this Directive], carry out an evaluation of this Directive and present a Report on the findings to the European Parliament, the Council and the European Economic and Social Committee accompanied, where appropriate, by a legislative proposal. Member States shall provide the Commission with the information necessary for the preparation of that report, in particular by providing data on the number of cross-border conversions, mergers and divisions, their duration and related costs. This evaluation should pay particular attention to the impact of this Directive in detecting and preventing cases of cross-border conversions, mergers or divisions representing artificial arrangements.