[ParlTrack]

Proposal for a directive
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~~not under any 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 advan~~. The procedure set out in this Directive aims at protecting the discretion of the Member Stagtes ~~or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In so far as~~to impose corporate taxes on profits and employee representation obligations on companies. Member States should be allowed to block conversions and mergers where these would amount to artificial arrangements entered into by companies with the intention of evading future obligations resulting from national rules on taxation and employee participation. The employee participation body should give its cons~~titutes a~~ent to any cross border conversion or merger. Any derogation from a fundamental right or freedom, the fight against abuses must be interpreted strictly and be based on an individual assessment of all relevant circumstances. A 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 setting 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.

2018/09/11
Committee: ECON

Paul TANG

Proposal for a directive
Recital 29 a (new)

(29a) To prevent conflicts of interests between the members of the management body and the interest of the company, they should not be allowed to benefit financially from the merger in the form of variable compensation, bonuses or rising share prices.

2018/09/11
Committee: ECON

Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point -1 (new)

Directive (EU) No 2017/1132
Title I – Chapter I – Article 1 a (new)

-1 In CHAPTER I, the following Article 1a is inserted: "Article 1a Interest of the company The management or administrative organ of a company is responsible for managing the company in the best interest of the company and society, meaning that it considers the needs of the shareholders, the employees other stakeholders and the environment in a balanced way, with the objective of sustainable value creation."

2018/09/11
Committee: ECON

Paul TANG

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

Directive (EU) No 2017/1132
Article 86 b – paragraph 1 – point 6 a (new)

(6a) ‘artificial arrangement’ means a company structure set up for abusive purposes, such as the circumvention of obligations arising from the legal and contractual rights of employees, creditors, or minority shareholders, the avoidance of rules on employee involvement, of social security payments, or profit shifting to reduce the corporate tax obligations, and that does not carry out a substantive or genuine economic activity supported by staff, equipment, assets and premises, such as, in particular, in the case of a ‘letterbox’ or ‘front’ subsidiary.

2018/09/11
Committee: ECON

Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point 3 Directive (EU) No 2017/1132

(ea) the representatives of the employees of the company have not given consent to the conversion based on the report by the management body following Article 86f of this Directive;

2018/09/11
Committee: ECON

Paul TANG

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

Directive (EU) No 2017/1132
Article 86 l – paragraph 2 a (new)

2 a. The representatives of the employees of the company have one month after receiving the report by the management body in accordance with Article 86f of this Directive to give or withhold their consent on the proposed conversion.

2018/09/11
Committee: ECON

Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point 9 a (new)

Directive (EU) No 2017/1132
Article 123 a (new)

(9 a) Article 123 a Preventing conflicts of interest due to management compensation To prevent a conflict of interest between the members of the management body or administrative organ and the interest of the company, in light of Article 1a (new) of this Directive, they are not allowed to benefit financially from the merger, in the form of a rise of the share price of the share packages in their (variable) compensation or bonuses paid out in light of the merger. On any compensation paid out in shares of the company in the first year after the merger to the members of the management body or administrative organ, the rise in share prices due to the merger shall be deducted from the value paid to the management body, where the share price on the day the merger was first made public will serve as the baseline.

2018/09/11
Committee: ECON

Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point 10 a (new)

Directive (EU) No 2017/1132
Article 124 b (new)

(10 a) Article 124b Employee consent on the proposed cross border merger The representatives of the employees of the company have one month after receiving the report by the management body following Article 124a of this Directive to give or withhold their consent on the proposed conversion.

2018/09/11
Committee: ECON

8 Amendments of Paul TANG related to 2018/0114(COD)

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