11 Amendments of Tom VANDENKENDELAERE related to 2016/0011(CNS)
Amendment 44 #
Proposal for a directive
Recital 1
Recital 1
(1) The current political priorities in international taxation highlight the need for ensuring that tax is paid where profits and value are generated. It is thus imperative to restore trust in the fairness of tax systems and allow governments to effectively exercise their tax sovereignty. These new political objectives have been translated into concrete action recommendations in the context of the initiative against Base Erosion and Profit Shifting (BEPS) by the Organisation for Economic Cooperation and Development (OECD). In response to the need for fairer taxation, the Commission, in its Communication of 17 June 2015 sets out an Action Plan for Fair and Efficient Corporate Taxation in the European Union3 (the Action Plan) in which it recognises that a fully-fledged CCCTB, with an appropriate and fair distribution key, would be the genuine "game changer" in the fight against artificial BEPS strategies. __________________ 3 Communication from the Commission to the European Parliament and the Council on a Fair and Efficient Corporate Tax System in the European Union: 5 Key Areas for Action COM(2015) 302 final of 17 June 2015.
Amendment 50 #
Proposal for a directive
Recital 2
Recital 2
(2) Most Member States, in their capacity as OECD members, have committed to implement the output of the 15 Action Items against genuine base erosion and profit shifting, released to the public on 5 October 2015. It is therefore essential for the good functioning of the internal market that, as a minimum, Member States implement their commitments under BEPS and more broadly, take action to discourage tax avoidance practices and ensure fair and effective taxation in the Union in a sufficiently coherent and coordinated fashion. In a market of highly integrated economies, there is a need for common strategic approaches and coordinated action, to improve the functioning of the internal market and maximise the positive effects of the initiative against BEPSgenuine BEPS strategies whilst at the same time taking adequate care of the competiveness of the companies operating within that internal market. Furthermore, only a common framework could prevent a fragmentation of the market and put an end to currently existing mismatches and market distortions. Finally, national implementing measures which follow a common line across the Union would provide taxpayers with legal certainty in that those measures would be compatible with Union law. In a Union characterised by very diverse national markets, an encompassing impact assessment of all anticipated measures remains crucial to ensure that this common line finds widespread support among Member States.
Amendment 68 #
Proposal for a directive
Recital 6
Recital 6
(6) In an effort to reduce their global tax liability, cross-border groups of companies have increasingly engaged in shifting profits, often through inflated interest payments on intra-group loans, out of high tax jurisdictions into countries with lower tax regimes. The interest limitation rule is necessary to discourage such genuine BEPS practices by limiting the deductibility of taxpayers’' net financial costs (i.e. the amount by which financial expenses exceed financial revenues). It is therefore necessary to fix a ratio for deductibility which refers to a taxpayer’'s earnings before interest, tax, depreciation and amortisation (EBITDA). Tax exempt financial revenues should not be set off against financial expenses. This is because only taxable income should be taken into account in determining up to how much of interest may be deducted. To facilitate taxpayers which run reduced risks related to base erosion and profit shifting, net interest should always be deductible up to a fixed maximum amount, which is triggered where it leads to a higher deduction than the EBITDA-based ratio. Where the taxpayer is part of a group which files statutory consolidated accounts, the indebtedness of the overall group should be considered for the purpose of granting taxpayers entitlement to deduct higher amounts of net financial costs. The interest limitation rule should apply in relation to a taxpayer's net financial costs without distinction of whether the costs originate in debt taken out nationally,intra-group loans taken out cross-border within the Union or with a third country. Although it is generally accepted that financial undertakings, i.e. financial institutions and insurance undertakings, should also be subject to limitations to the deductibility of interest, it is equally acknowledged that these two sectors present special features which call for a more customised approach. As the discussions in this field are not yet sufficiently conclusive in the international and Union context, it is not yet possible to provide specific rules in the financial and insurance sectors.
Amendment 117 #
Proposal for a directive
Article 4 – title
Article 4 – title
Interest limitation rule on intra-group borrowings
Amendment 118 #
Proposal for a directive
Article 4 – paragraph 1
Article 4 – paragraph 1
1. BIntra-group borrowing costs shall always be deducted to the extent that the taxpayer receives interest or other taxable revenues from financial assets.
Amendment 125 #
Proposal for a directive
Article 4 – paragraph 2
Article 4 – paragraph 2
2. EIntra-group exceeding borrowing costs shall be deductible in the tax year in which they are incurred only up to 30 percent of the taxpayer's earnings before interest, tax, depreciation and amortisation (EBITDA) or up to an amount of EUR 13 000 000, whichever is higher. The EBITDA shall be calculated by adding back to taxable income the tax-adjusted amounts for net interest expenses and other costs equivalent to interest as well as the tax-adjusted amounts for depreciation and amortisation.
Amendment 127 #
Proposal for a directive
Article 4 – paragraph 3 – subparagraph 1
Article 4 – paragraph 3 – subparagraph 1
By derogation from paragraph 2, the taxpayer may be given the right to fully deduct intra-group exceeding borrowing costs if the taxpayer can demonstrate that the ratio of its equity over its total assets is equal to or higher than the equivalent ratio of the group.
Amendment 129 #
Proposal for a directive
Article 4 – paragraph 3 – subparagraph 2 – point b
Article 4 – paragraph 3 – subparagraph 2 – point b
(b) the group consists of all entities which are included in audited consolidated financial statements drawn up in accordance with the International Financial Reporting Standards or the national financial reporting system of a Member State or the Generally Accepted Accounting Principles of the United States (GAAP)qualifying as a group entity;
Amendment 136 #
Proposal for a directive
Article 4 – paragraph 4
Article 4 – paragraph 4
4. The EBITDA of a tax year which is not fully absorbed by the intra-group exceeding borrowing costs incurred by the taxpayer in that or previous tax years may be carried forward for future tax years.
Amendment 141 #
Proposal for a directive
Article 4 – paragraph 5
Article 4 – paragraph 5
5. BIntra-group exceeding borrowing costs which cannot be deducted in the current tax year under paragraph 2 shall be deductible up to the 30 percent of the EBITDA in subsequent tax years in the same way as the intra-group exceeding borrowing costs for those years.
Amendment 142 #
Proposal for a directive
Article 4 – paragraph 5 a (new)
Article 4 – paragraph 5 a (new)
5a. Paragraphs 2 to 5 shall not apply to interest that results from (i) borrowings with a valid commercial justification; (ii) borrowings concluded between two or more independent enterprises taking into account cash flow, credit rating, currency and other relevant factors of the borrowing entity; or (iii) borrowings used to fund public- benefit projects.