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35 Amendments of Markus FERBER related to 2016/0337(CNS)

Proposal for a directive
Recital 2

(2) To support the proper functioning of the internal market, the corporate tax environment in the Union should be shaped in accordance with the principle that companies pay their fair share of tax in the jurisdiction(s) where their profits are generated. It is therefore necessary to provide for mechanisms that discourage companies from taking advantage of mismatches amongst national tax systems in order to lower their tax liability. It is equally important to also stimulate growth and economic development in the internal market by facilitating cross-border trade and corporate investment. To this end, it is necessary to eliminate both double taxation and double non-taxation risks in the Union through eradicating disparities in the interaction of national corporate tax systems. At the same time, companies need an easily workable tax and legal framework for developing their commercial activity and expanding it across borders in the Union. In that context, remaining cases of discrimination should also be removed. The proposal for a CCTB should therefore harmonise the provisions on the basis for calculating corporate tax, but not the rates of corporate tax.

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 consolidation. Consolidation should take place only after the rules on the common base have been fully implemented.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 5

(5) Many aggressive tax planning structures tend to feature in a cross-border context, which implies that the participating groups of companies possess a minimum of resources. On this premise, for reasons of proportionality, the rules on a common base should initially be mandatory only for companies which belong to a group of a substantial size. For that purpose, a size- related threshold of EUR 750 000 000 should be fixed on the basis of the total consolidated revenue of a group which files consolidated financial statements. In addition, to ensure coherence between the two steps of the CCCTB initiative, the rules on a common base should be mandatory for companies which would be considered as a group should the full initiative materialiThis threshold should be reduced by EUR 75 000 000 per year over a ten-year period. In addition, to ensure coherence between the two steps of the CCCTB initiative, consolidation should not take place until ten years after the entry into force of the common base. In order to better serve the aim of facilitating trade and investment in the internal market, the rules on a common corporate tax base should also be available, as an option, to companies which do not meet those criteria.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 6 a (new)

(6a) Current corporate tax legislation is not suited to the challenges of the digital economy. Digital services are largely decoupled from physical establishments. Current corporate tax legislation therefore needs to be expanded to include the concept of virtual establishment. Particular account should be taken in this connection of the work carried out by the OECD on an internationally consistent set of rules.

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 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 expensed in the year incurred (with the exception of immovable property). Small starting companies without associated enterprises which are particularly innovattaxpayers should receive (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 expensetax credit of 10% for research and development costs.

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 to give 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 essential 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 rulesThe interest limitation rule constitutes an appropriate and sufficient tool for this purpose.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 12

(12) In order to discourage the shifting of passive (mainly, financial) income out of highly-taxed companies, any losses that such companies may incur at the end of a tax year should be presumed to mostly correspond to the results of trading activity. Based on that premise, taxpayers should be allowed to carry losses forward indefinitely with~~out~~ restrictions on the deductible amount per year. Since the carry-forward of losses is intended to ensure that a taxpayer pays tax on its real income, there is no reason to place a time limit on carry forward. Regarding the prospect for a loss carry-back, no such a rule would need to be introduced because that this is relatively rare in the practice of Member States, and tends to lead to excessive complexityIn addition, there should be the possibility of a loss carry-back. Furthermore, an anti- abuse provision should be laid down in order to prevent, thwart or counter attempts to circumvent the rules on loss deductibility through purchasing loss- making companies.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 19

(19) In order to supplement or amend certain non-essential elements of this Directive, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission with respect of (i) taking into account changes to the laws of Member States concerning the company forms and corporate taxes and amend Annexes I and II accordingly; (ii) laying down additional definitions; (iii) ~~enacting detailed rules against tax avoidance in a number of specified fields relevant to the allowance for growth and investment; (iv)~~ defining the concepts of legal and economic ownership of leased assets in more detail; (iv) calculating the capital and interest elements of lease payments and the depreciation base of leased assets; and (vi) defining more precisely the categories of fixed assets subject to depreciation. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and the Council.

2017/09/29
Committee: ECON

Proposal for a directive
Recital 23

(23) The Commission should be required to review the application of the Directive five years after its entry into force and report to the Council and the European Parliament on its operation. Member States should be required to communicate to the Commission the text of the provisions of national law which they adopt in the field covered by this Directive,

2017/09/29
Committee: ECON

Proposal for a directive
Article 1 – paragraph 1

1. This Directive establishes a system of a common base for the taxation of certain companies and lays down rules for the calculation of that base. The Member State concerned shall decide on the amount of the corporate tax rate.

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. The turnover threshold shall be reduced by EUR 75 000 000 per year over a ten-year period;

2017/09/29
Committee: ECON

Proposal for a directive
Article 4 – paragraph 1 – subparagraph 1 – point 12

(12) 'borrowing costs' means interest expenses on all forms of debt, other costs economically equivalent to interest and expenses incurred in connection with the raising of finance, as defined in national law, including payments under profit participating loans, imputed interest on convertible bonds and zero coupon bonds, payments under alternative financing arrangements, the finance cost elements of finance lease payments, capitalised interest included in the balance sheet value of a related asset, the amortisation of capitalised interest, amounts measured by reference to a funding return under transfer pricing rules, notional interest amounts under derivative instruments or hedging arrangements related to an entity's borrowings, ~~the defined yield on net equity increases as referred to in Article 11 of this Directive,~~ certain foreign exchange gains and losses on borrowings and instruments connected with the raising of finance, guarantee fees for financing arrangements, arrangement fees and similar costs related to the borrowing of funds;

2017/09/29
Committee: ECON

Proposal for a directive
Article 4 – paragraph 1 – subparagraph 1 – point 31 – paragraph 1 – introductory part

(31) 'hybrid mismatch' means a situation ~~between~~involving a taxpayer and an associated enterprise or a structured arrangement between parties in different tax jurisdictions where any of the following outcomes is attributable to differences in the legal characterisation of a financial instrument or entity, or in s referred to in Article 1(2)(b) of Council Directive 2017/952 amending Directive (EU) 2016/1164 as regards hybrid mismatches withe t~~reatment of a commercial presence as a permanent establishment:~~hird countries;

2017/09/29
Committee: ECON

Proposal for a directive
Article 4 – paragraph 1 – subparagraph 1 – point 31 – subparagraph 2

A hybrid mismatch only arises to the extent that the same payment deducted, expenses incurred or losses suffered in two jurisdictions exceed the amount of income that is included in both jurisdictions and which can be attributed to the same source.deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 4 – paragraph 1 – subparagraph 1 – point 31 – subparagraph 3

A hybrid mismatch also includes the transfer of a financial instrument under a structured arrangement involving a taxpayer where the underlying return on the transferred financial instrument is treated for tax purposes as derived simultaneously by more than one of the parties to the arrangement, who are resident for tax purposes in different jurisdictions, giving rise to any of the following outcomes: (a) connected with the underlying return without a corresponding inclusion for tax purposes of such payment, unless the underlying return is included in the taxable income of one the parties involved; (b) on a payment derived from the transferred financial instrument to more than one of the parties involved;deleted a deduction of a payment a relief for tax withheld at source

2017/09/29
Committee: ECON

Proposal for a directive
Article 4 – paragraph 1 – subparagraph 1 – point 33 a (new)

(33a) ‘virtual permanent establishment’ means an undertaking’s significant digital presence in a Member State, with a minimum turnover of EUR 5 000 000, the objective of which is to provide digital offerings;

2017/09/29
Committee: ECON

Proposal for a directive
Article 5 a (new)

Article 5a Virtual permanent establishment Article 5 shall also apply to virtual permanent establishments. A virtual permanent establishment is an undertaking’s significant digital presence in a Member State, with a minimum turnover of EUR 5 000 000, the objective of which is to provide digital offerings.

2017/09/29
Committee: ECON

Proposal for a directive
Article 5 b (new)

Article 5b By 31 December 2018, taking particular account of ongoing work at OECD level, the Commission shall adopt a delegated act defining ‘virtual permanent establishment’ on the basis of the following criteria: – volume of data collected and used – volume of digital content generated – number of users – number of digital contracts

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 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 – subparagraph 1

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 amountFor research and development costs not exceeding EUR 20 000 000, the taxpayer shall receive a tax credit of 10% of the costs incurred.

2017/09/29
Committee: ECON

Proposal for a directive
Article 9 – paragraph 3 – subparagraph 2

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 thedeleted it is an unlisted enterprise ewith~~er 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.~~ it has not been registered for

2017/09/29
Committee: ECON

Proposal for a directive
Article 11

~~[...]~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 13

~~[...]~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 22

1. A long-term contract is one which complies with all of the following conditions: (a) manufacturing, installing or constructing, or for performing services; (b) its term exceeds, or is expected to exceed, 12 months. 2. 16, revenues relating to a long-term contract shall be considered to have been accrued for the amount that corresponds to the part of the long-term contract that has been completed in the relevant tax year. The percentage of completion of the long-term contract shall be determined by reference to the ratio of costs of that year to the overall estimated costs. 3. contracts shall be deductible in the tax year in which they are incurred.Article 22 deleted Long-term contracts it is concluded for the purpose of By way of derogation from Article Costs relating to long-term

2017/09/29
Committee: ECON

Proposal for a directive
Article 23 – paragraph 2 – point b

(b) if the term of the provision is 12 months or longer and there is no agreed discount rate, the provision shall be discounted at the yearly average of the Euro Interbank Offered Rate (Euribor) for obligations with a maturity of 12 months, as published by the European Central Bank, in the calendar year in the course of which the tax year endsa rate of 5.5%;

2017/09/29
Committee: ECON

Proposal for a directive
Article 29

1. value of transferred assets, at the time of exit of the assets, less their value for tax purposes, shall be treated as accrued revenues in any of the following circumstances: (a) from its head office to its permanent establishment in another Member State or in a third country; (b) from its permanent establishment in a Member State to its head office or another permanent establishment in another Member State or in a third country, to the extent that, due to the transfer, the Member State of the permanent establishment no longer has the right to tax theArticle 29 deleted Exit taxation An amount equal to the market where a taxpayer transfer~~red~~s assets; (c) residence to another Member State or to a third country, except for those assets which remain effectively connected with a permanent establishment in the first Member State; (d) business carried on by its permanent establishment from a Member State to another Member State or to a third country, to the extent that, due to the transfer, the Member State of the permanent establishment no longer has the right to where a taxpayer transfers assets where a taxpayer transfers its tax twhe transferred assets. 2. assets, tax residence or the business carried on by a permanent establishment are transferred shall accept the value established by the Member State of the taxpayer or of the permanent establishment as the starting value of the assets for tax purposes. 3. transfers related to the financing of securities, assets posted as collateral or where the asset transfer takes place in order to meet prudential capital requirements or for the purpose of liquidity management where those assets are set to revert to the Member State of the transferor within a period of 12 months.re a taxpayer transfers the The Member State to where the This Article shall not apply to asset

2017/09/29
Committee: ECON

Proposal for a directive
Article 41 – paragraph 1

1. Losses incurred in a tax year by a resident taxpayer or a permanent establishment of a non-resident taxpayer may be carried forward and deducted in subsequent tax years, unless otherwise provided by this Directiveof up to EUR 1 000 000 shall be deducted from profits made in the tax year immediately preceding.

2017/09/29
Committee: ECON

Proposal for a directive
Article 41 – paragraph 2

2. ~~A reduction of the tax base as a result of considering losses from previous tax years shall~~Losses suffered in a tax year by a resident taxpayer or the permanent establishment of a non-resident taxpayer which have not been deducted in accordance with paragraph 1 can be carried forward and deducted in later tax years up to a total profit of EUR 1 000 000 with not res~~ult in a negative amount~~triction and beyond that up to 60% of the profit which is in excess of the EUR 1 000 000, unless otherwise specified by this directive.

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. 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. Losses deducted pursuant to 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 aArticle 42 deleted Loss relief and recapture A resident taxpayer that is still The deduction shall be in The resident taxpayer shall add where, at the end of the fifth tax where the qualifying subsidiary~~; (d)~~ as where the p~~arent company no longer fulfils the requirements of Article 3(1).~~ermanent

2017/09/29
Committee: ECON

Proposal for a directive
Article 61

~~[...]~~deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 61a

To the extent that a payment, expenses or losses of a taxpayer who is resident for tax purposes in both a Member State and a third country, in accordance with the laws of that Member State and that third country, are deductible from the taxable base in both jurisdictions and that payment, those expenses or losses can be set-off in the Member State of the taxpayer against taxable income that is not included in the third country, the Member State of the taxpayer shall deny the deduction of the payment, expenses or losses, unless the third country has already done so.Article 61a deleted Tax residency mismatches

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 Council and to the European Parliament on the operation of this Directive.

2017/09/29
Committee: ECON

Proposal for a directive
Article 69 – paragraph 2

Notwithstanding the first subparagraph, the Commission shall, three years after the entry into force of this Directive, examine the functioning of Article 11 and consider adjustments to the definition and calibration of the AGI. The Commission shall undertake a thorough analysis of how the AGI can encourage companies that are entitled to opt for applying the rules of this Directive to finance their activities through equity.deleted

2017/09/29
Committee: ECON

Proposal for a directive
Article 70 – paragraph 1 – subparagraph 1

Member States shall adopt and publish, by 31st January 20189 at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.

2017/09/29
Committee: ECON

Proposal for a directive
Article 70 – paragraph 1 – subparagraph 2

They shall apply those provisions from 1st January 201920.

2017/09/29
Committee: ECON