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Activities of Marco VALLI related to 2016/0337(CNS)

Plenary speeches (1)

2016/11/22
Dossiers: 2016/0337(CNS)

Shadow reports (1)

2016/11/22
Committee: ECON
Dossiers: 2016/0337(CNS)
Documents: PDF(883 KB) DOC(156 KB)

Amendments (36)

Proposal for a directive
Recital 1

(1) Companies which seek to do business across frontiers within the Union encounter serious obstacles and market distortions owing to the existence and interaction of 28 disparate corporate tax systems. Furthermore, tax planning structures have become ever-more aggressive, complex and sophisticated over time, as they develop across various jurisdictions and effectively take advantage of the technicalities of a tax system or of mismatches between two or more tax systems for the purpose of reducing the tax liability of companies. Although those situations highlight shortcomings that are completely different in nature, they both create obstacles and distortions which impede the proper functioning of the internal market and grant multinational companies an unfair competitive advantage over small and medium-sized enterprises. Action to rectify those problems should therefore address both types of market deficiencies.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 4

(4) Considering the need to act swiftly in order to ensure a proper functioning of the internal market by making it, on the one hand, friendlier to trade and investment and, on the other hand, more resilient to tax avoidance schemes, it is necessary to divide the ambitious CCCTB initiative into two separate proposals. At a first stage, rules on a common corporate tax base should be enacted, before addressing, at a second stage, the issue of consolidationcrucial to achieve an ambitious CCCTB with a full consolidation and therefore that the two separate proposals move in parallel and are implemented at the same time.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 6

(6) It is necessary to define the concept of a permanent establishment situated in the Union and belonging to a taxpayer who is resident for tax purposes within the Union. The aim would be to ensure that all concerned taxpayers share a common understanding and to exclude the possibility of a mismatch due to divergent definitions. ~~On the contr~~Similarly, it ~~should not be seen as essential~~is important to have a common definition of permanent establishments situated in a third country, or in the Union but belonging to a taxpayer who is resident for tax purposes in a third country. Th~~is dimens~~e definition should be~~tter be left~~ incorporated accordingly into bilateral tax treaties and national law ~~due to its complicated interaction with international agreements~~.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 8

(8) Taxable revenues should be reduced by business expenses and ~~certain~~ other items. Deductible business expenses should normally include all costs relating to sales and expenses linked to the production, maintenance and securing of income. To support real innovation in the economy and modernise the internal market, ~~deductions should be provided for research and development costs, including super-deductions, and those should be fully expens~~without opening new opportunities for aggressive tax planning, tax deductions for research and development shall be strictly limited into the year incurred (with the exception of immovable property). Small starting companies without associated enterprises which are particularly innovative (a category which will in particular cover start-ups) should also be supported through enhanced super-deductions for research and development costs. In order to ensure legal certainty, there should also be a list of non-deductible expenseactual costs incurred in genuine R&D investments; other public policy instruments shall be preferred to unproductive tax incentives to multinationals in pursuing the objective to stimulate investments.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 10

(10) The fact that interest paid out on loans is deductible from the tax base of a taxpayer whilst this is not the case for profit distributions creates a definitive advantage in favour of financing through debt as opposed to equity. Given the risks that this entails for the indebtedness of companies, it is critical to provide for measures which neutralise the current bias against equity financing. In this light, it is ~~envisaged~~necessary to gimove ~~taxpayers an allowance for growth and investment according to which increases in a taxpayer's equity should be deductible from its taxable base subject to certain conditions. Thus, it would be esse~~gradually towards a regime of full non-deductibility of interest expenses at the global level. Untial to ensure that the system does not suffer cascading effects and to this end, it would be necessary to exclude the tax value of a taxpayer's participations in associated enterprises. Finally, to make the scheme of the allowance sufficiently robust, it would also be required to lay down anti-tax avoidance rulessuch reform is achieved, limitations on interest deductibility shall at least be strengthened in order to tackle the issue of excessive debt financing.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 13

(13) In order to facilitate the cash-flow capacity of businesses – for instance, by compensating start-up losses in a Member State with profits in another Member State – and encourage the cross-border expansion within the Union, taxpayers should be entitled to temporarily take into account the losses incurred by their immediate subsidiaries and permanent establishments situated in other Member States. For that purpose, a parent company or head office located in a Member State should be able to deduct from its tax base, in a given tax year, the losses incurred in the same tax year by its immediate subsidiaries or permanent establishments situated in other Member States in proportion to its holding. The parent company should then be required to add back to its tax base, considering the amount of losses previously deducted, any subsequent profits made by those immediate subsidiaries or permanent establishments. As it is vital to safeguard national tax revenues, the deducted losses should also be reincorporated automatically if this has not already occurred after a certain number of years or if the requisites to qualify as an immediate subsidiary or permanent establishment are no longer met.deleted

2017/09/29
Committee: ECON

Proposal for a directive
Recital 21 a (new)

(21a) Within a period of six months after the adoption of this Directive, the Commission shall present a legislative proposal for a minimum effective tax rate at the European level, based on a comparative analysis of different national effective tax rates and Member States' best practices.

2017/09/29
Committee: ECON

Proposal for a directive
Article 2 – paragraph 1 – point c

(c) it belongs to a consolidated group for financial accounting purposes with a total consolidated group revenue that exceeded EUR 750 000 000 during the financial year preceding the relevant financial year;

2017/09/29
Committee: ECON

Proposal for a directive
Article 2 – paragraph 2 – subparagraph 1

This Directive shall also apply to a company that is established under the laws of a third country in respect of its permanent establishments situated in one or more Member State, where the company meets the conditions laid down in points (b) to (d) of paragraph 1. Furthermore, it shall also apply to any entity located in a Member State that is the place of effective management of the group's business within the EU, meaning the place where key management and commercial decisions related to the operations inside the EU are implemented;

2017/09/29
Committee: ECON

Proposal for a directive
Article 3 – paragraph 1 – point b

(b) it has an ownership right amounting to more than 750 % of the subsidiary’s capital or owns more than 750 % of the rights giving entitlement to profit.

2017/09/29
Committee: ECON

Proposal for a directive
Article 5 – paragraph 1 – introductory part

1. A taxpayer shall be considered to have a permanent establishment in a Member State other than the Member State in which it is resident for tax purposes when it has a fixed place or a digital presence in that other Member State through which it carries on its business, wholly or partly, including in particular:

2017/09/29
Committee: ECON

Proposal for a directive
Article 5 – paragraph 6 a (new)

6a. Member States shall align their bilateral tax treaties to this common definition.

2017/09/29
Committee: ECON

Proposal for a directive
Article 9 – paragraph 2

2. The expenses referred to in paragraph 1 shall include all costs of sales and all expenses, net of deductible value added tax, that the taxpayer incurred with a view to obtaining or securing income, including costs for research and development, provided that are strictly limited to the actual costs of inputs for genuine R&D expenditures, and costs incurred in raising equity or debt for the purposes of the business.

2017/09/29
Committee: ECON

Proposal for a directive
Article 9 – paragraph 3

3. In addition to the amounts which are deductible as costs for research and development in accordance with paragraph 2, the taxpayer may also deduct, per tax year, an extra 50% of such costs, with the exception of the cost related to movable tangible fixed assets, that it incurred during that year. To the extent that costs for research and development reach beyond EUR 20 000 000, the taxpayer may deduct 25% of the exceeding amount. By way of derogation from the first subparagraph, the taxpayer may deduct an extra 100% of its costs for research and development up to EUR 20 000 000 where that taxpayer meets all of the following conditions: (a) fewer than 50 employees and an annual turnover and/or annual balance sheet total that does not exceed EUR 10 000 000; (b) longer than five years. If the taxpayer is not subject to registration, the period of five years may be taken to start at the moment that the enterprise either starts, or is liable to tax for, its economic activity; (c) it has not been formed through a merger; (d) it does not have any associated enterprises.deleted it is an unlisted enterprise with it has not been registered for

2017/09/29
Committee: ECON

Proposal for a directive
Article 9 – paragraph 4

~~4. Member States may provide for the deduction of gifts and donations to charitable bodies.~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 11

~~[...]~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 13 – paragraph 2 – subparagraph 1

Exceeding borrowing costs shall be deductible in the tax year in which they are incurred for maximum of 310 % of the taxpayer's earnings before interest, tax, depreciation and amortisation (‘EBITDA’) or for a maximum amount of EUR 31 000 000, whichever is higher.

2017/09/29
Committee: ECON

Proposal for a directive
Article 13 – paragraph 2 – subparagraph 2

For the purposes of this Article, where a taxpayer is permitted or required to act on behalf of a group, as defined in the rules of a national group taxation system, the entire group shall be treated as a taxpayer. In those circumstances, exceeding borrowing costs and the EBITDA shall be calculated for the entire group. The amount of EUR 31 000 000 shall also be considered for the entire group.

2017/09/29
Committee: ECON

Proposal for a directive
Article 13 – paragraph 7

~~7. Paragraphs 1 to 6 shall not apply to financial undertakings, including those that are part of a consolidated group for financial accounting purposes.~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 42

1. profitable after having deducted its own losses pursuant to Article 41 may additionally deduct losses incurred, in the same tax year, by its immediate qualifying subsidiaries, as referred to in Article 3(1), or by permanent establishment(s) situated in other Member States. This loss relief shall be given for a limited period of time in accordance with paragraphs 3 and 4 of this Article. 2. The deduction shall be in proportion to the holding of the resident taxpayer in its qualifying subsidiaries as referred to in Article 3(1) and full for permanent establishments. In no case shall the reduction of the tax base of the resident taxpayer result in a negative amount. 3. back to its tax base, up to the amount previously deducted as a loss, any subsequent profits made by its qualifying subsidiaries as referred to in Article 3(1) or by its permanent establishments. 4. paragraphs 1 and 2 shall automatically be reincorporated into the tax base of the resident taxpayer in any of the following circumstances: (a) year after the losses became deductible, no profit has been reincorporated or the reincorporated profits do not correspond to the full amount of losses deducted; (b) referred to in Article 3(1) is sold, wound up or transformed into a permanent establishment; (c) establishment is sold, wound up or transformed into a subsidiary; (d) longer fulfils the requirements of Article 3(1).Article 42 deleted Loss relief and recapture A resident taxpayer that is still The resident taxpayer shall add Losses deducted pursuant to where, at the end of the fifth tax where the qualifying subsidiary as where the permanent where the parent company no

2017/09/29
Committee: ECON

Proposal for a directive
Article 53 – paragraph 1 – subparagraph 1

By way of derogation from points (c) and (d) of Article 8, a taxpayer shall not be exempt from tax on foreign income that the taxpayer received as a profit distribution from an entity in a third country or as proceeds from the disposal of shares held in an entity in a third country where that entity in its country of tax residence is subject to a ~~statutory~~n effective corporate tax rate lower than ~~half~~95% of the ~~statutory~~effective tax rate that the taxpayer would have been subject to, in connection with such foreign income, in the Member State of its residence for tax purposes.

2017/09/29
Committee: ECON

Proposal for a directive
Article 58 – paragraph 1

1. For the purposes of calculating the tax base under the rules of this Directive, a Member State shall disregard an arrangement or a series of arrangements which, having been put in place for the ~~essential~~ purpose of obtaining a tax advantage that defeats the object or purpose of this Directive, are not genuine~~, having regard to all relevant facts and circumstances~~ or can be considered harmful. An arrangement may comprise more than one step or part.

2017/09/29
Committee: ECON

Proposal for a directive
Article 58 – paragraph 2

2. For the purposes of paragraph 1, an arrangement or a series thereof shall be regarded as non-genuine to the extent that they are not, in whole or in part, put in place for valid commercial reasons that reflect economic reality and one of their main purpose is the artificial shifting of profits out of the EU.

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 1 – subparagraph 1 – introductory part

An entity, a trust, a partnership or a permanent establishment of which the profits are not subject to tax or are exempt from tax in the Member State of its head office’, shall be treated as a controlled foreign company where the following conditions are met:

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 1 – subparagraph 1 – point a

(a) in the case of an entity, the taxpayer itself, or together with its associated enterprises, holds a direct or indirect participation of more than 50 % of the voting rights, or owns directly or indirectly more than 50 % of capital or is entitled to receive more than 50 % of the profits of that entity~~; and~~, or can be considered as the place of effective management where key management and commercial decisions directing or influencing the business of that entity are implemented;

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 1 – subparagraph 1 – point b

(b) the actual corporate tax rate paid by the entity, trust, partnership or permanent establishment on its profits is lower than 95% of the diefference between the corporate tax that would have been charged on the profits of the entity or permanent establishment in accordance with the rules of this Directive and the actual corporate tax paid on those profits by the entity or permanent establishmentctive tax rate that the taxpayer would have been subject to in the Member State; that rate shall be calculated on the basis of the profits before the implementation of operations introduced by the countries in question to reduce the tax base subject to the rate and revised each year.

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 2 – subparagraph 1 – introductory part

Where an entity or permanent establishment is treated as a controlled foreign company under paragraph 1, ~~non- distributed~~all the foreign income of the entity or permanent establishment shall be subject to tax ~~to the extent that it is derived from the following categories:~~.

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 2 – subparagraph 1 – point a

~~(a) interest or any other income generated by financial assets;~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 2 – subparagraph 1 – point b

~~(b) royalties or any other income generated from intellectual property;~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 2 – subparagraph 1 – point c

~~(c) dividends and income from the disposal of shares;~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 2 – subparagraph 1 – point d

~~(d) income from financial leasing;~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 2 – subparagraph 1 – point e

~~(e) income from insurance, banking and other financial activities;~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 2 – subparagraph 1 – point f

~~(f) income from invoicing companies that earn sales and services income from goods and services purchased from and sold to associated enterprises and add no or little economic value.~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 59 – paragraph 3

3. An entity or permanent establishment shall not be treated as a controlled foreign company as referred to in paragraph 1 where not more than one third of the income accruing to the entity or permanent establishment falls within categories (a) to (f) of paragraph 2. Financial undertakings shall not be treated as controlled foreign companies under paragraph 1 where not more than one third of the income accruing to the entity or permanent establishment from categories (a) to (f) of paragraph 2 comes from transactions with the taxpayer or its associated enterprises.deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 69 – paragraph 1

The Commission shall, five years after the entry into force of this Directive, review its application and report to the European Parliament and the Council on the operation of this Directive.

2017/09/29
Committee: ECON

Proposal for a directive
Article 69 a (new)

Article 69a Sanctions Member States shall provide for sanctions for infringements of the national provisions adopted in accordance with this Directive and shall take all the measures necessary to ensure that those sanctions are enforced. The sanctions provided for shall be effective, proportionate and dissuasive.

2017/09/29
Committee: ECON