23 Amendments of Ramón JÁUREGUI ATONDO related to 2016/0011(CNS)
Amendment 47 #
Proposal for a directive
Recital 1 a (new)
Recital 1 a (new)
(1a). The European Union believes that combatting fraud, tax evasion and tax avoidance is an overriding political priority, as aggressive tax planning practices are unacceptable from the point of view of the integrity of the internal market and social justice.
Amendment 54 #
Proposal for a directive
Recital 3
Recital 3
(3) It is necessary to lay down rules in order to strengthen the average level of protection against aggressive tax planning in the internal market. As these rules would have to fit in 28 separate corporate tax systems, they should be limited to general provisions and leave the implementation to Member States as they are better placed to shape the specific elements of those rules in a way that fits best their corporate tax systems. This objective could be achieved by creating a minimum level of protection for national corporate tax systems across the Union. It is therefore necessary to coordinate the responses of Member States in implementing the outputs of the 15 Action Items against base erosion and profit shifting with the aim to improve the effectiveness of the internal market as a whole in tackling tax avoidance practices. It is therefore necessary to set a common minimum level of protection for the internal market in specific fields.
Amendment 66 #
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, out of high tax jurisdictions into countries with lower tax regimes. The interest limitation rule is necessary to discourage such 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, 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 73 #
Proposal for a directive
Recital 7
Recital 7
(7) Exit taxes have the function of ensuring that where a taxpayer moves assets and profits or its tax residence out of the tax jurisdiction of a State, that State taxes the economic value of any capital gain created in its territory even if this gain has not yet been realised at the time of the exit. It is therefore necessary to specify cases in which taxpayers are subject to exit tax rules and taxed on unrealised capital gains which have been built in their transferred assets or profits. In order to compute the amounts, it is critical to fix a market value for the transferred assets or profits based on the arm's length principle. Within the Union, it is necessary to address the application of exit taxation and illustrate the conditions for being compliant with Union law. In those situations, taxpayers should have the right to either immediately pay the amount of exit tax assessed or defer payment of the amount of tax, possibly together with interest and a guarantee, over a certain number of years and to settle their tax liability through staggered payments. Exit tax should not be charged where the transfer of assets or profits is of a temporary nature and as long as the assets or profits are intended to revert to the Member State of the transferor, where the transfer takes place in order to meet prudential requirements or for the purpose of liquidity management or when it comes to securities' financing transactions or assets posted as collateral. However, Member States may provide for deduction in such cases.
Amendment 90 #
Proposal for a directive
Recital 10
Recital 10
(10) Controlled Foreign Company (CFC) rules have the effect of re-attributing the income of a low-taxed controlled subsidiary to its parent company. Then, the parent company becomes taxable to this attributed income in the State where it is resident for tax purposes. Depending on the policy priorities of that State, CFC rules may target an entire low-taxed subsidiary or be limited to income which has artificially been diverted to the subsidiary. It is desirable to address situations both in third countries and in the Union. To comply with the fundamental freedoms, the impact of the rules within the Union should be limited to arrangements which result in the artificial shifting of profits out of the Member State of the parent company towards the CFC. In this case, the amounts of income attributed to the parent company should be adjusted by reference to the arm’s length principle, so that the State of the parent company only taxes amounts of CFC income to the extent that they do not comply with this principle. CFC rules should exclude financial undertakings from their scope where those are tax resident in the Union, including permanent establishments of such undertakings situated in the Union. This is because the scope for a legitimate application of CFC rules within the Union should be limited to artificial situations without economic substance, which would imply that the heavily regulated financial and insurance sectors would be unlikely to be captured by those rules.
Amendment 111 #
Proposal for a directive
Article 2 – paragraph 1 – point 5
Article 2 – paragraph 1 – point 5
(5) ‘transfer of assets’ means an operation whereby the right to tax the transferred assets (including profits) passes to another Member State or third country, whilst the assets remain under the beneficial ownership of the same taxpayer, excluding transfers of assets of a temporary nature as long as the assets are intended to revert to the Member State of the transferor;
Amendment 126 #
Proposal for a directive
Article 4 – paragraph 2 a (new)
Article 4 – paragraph 2 a (new)
2a. In the case of financial undertakings, excess borrowing costs shall be deductible only in the tax year in which they are incurred, up to a maximum of 70 percent of the taxpayer's earnings before interest, tax, depreciation and amortisation (EBITDA). EBITDA shall be calculated as laid down in Article 4(2).
Amendment 131 #
Proposal for a directive
Article 4 – paragraph 3 – subparagraph 2 – point e
Article 4 – paragraph 3 – subparagraph 2 – point e
(e) payments to associated enterprises do not exceed 10 % of the group’s total net interest expense, or 50 % in the case of financial undertakings.
Amendment 145 #
Proposal for a directive
Article 4 – paragraph 6
Article 4 – paragraph 6
Amendment 154 #
Proposal for a directive
Article 5 – paragraph 1 – introductory part
Article 5 – paragraph 1 – introductory part
1. A taxpayer shall be subject to tax at an amount equal to the market value of the transferred assets, including profits, at the time of exit, less their value for tax purposes, in any of the following circumstances:
Amendment 158 #
Proposal for a directive
Article 5 – paragraph 1 – point c
Article 5 – paragraph 1 – point c
(c) a taxpayer transfers its tax residence to another Member State or to a third country, except for those assets, including profits, which remain effectively connected with a permanent establishment in the first Member State;
Amendment 160 #
Proposal for a directive
Article 5 – paragraph 1 – subparagraph 2
Article 5 – paragraph 1 – subparagraph 2
For the purposes of point (c) of the first subparagraph, any subsequent transfer to a third country of assets, including profits, out of the permanent establishment which is situated in the first Member State and which the assets are effectively connected with shall be deemed to be a disposal at market value.
Amendment 162 #
Proposal for a directive
Article 5 – paragraph 2 – point a
Article 5 – paragraph 2 – point a
(a) a taxpayer transfers assets, including profits, from its head office to its permanent establishment in another Member State or in a third country that is party to the European Economic Area Agreement (EEA Agreement);
Amendment 163 #
Proposal for a directive
Article 5 – paragraph 2 – point b
Article 5 – paragraph 2 – point b
(b) a taxpayer transfers assets, including profits, from its permanent establishment in a Member State to its head office or another permanent establishment in another Member State or a third country that is party to the EEA Agreement;
Amendment 166 #
Proposal for a directive
Article 5 – paragraph 4 – point b
Article 5 – paragraph 4 – point b
(b) the transferred assets, including profits, are subsequently transferred to a third country;
Amendment 167 #
Proposal for a directive
Article 5 – paragraph 4 – point d
Article 5 – paragraph 4 – point d
(d) the taxpayer is engaged in a settlement procedure with its creditors, goes bankrupt or is wound up.
Amendment 169 #
Proposal for a directive
Article 5 – paragraph 6
Article 5 – paragraph 6
6. For the purposes of paragraphs 1 to 5, 'market value' is the amount for which an asset can be exchanged or mutual obligations can be settled between willing unrelated buyers and sellers in a direct transaction. The Commission shall issue a delegated act that sets out a calculation methodology for market value, which may be updated periodically.
Amendment 170 #
Proposal for a directive
Article 5 – paragraph 7
Article 5 – paragraph 7
7. This article shall not apply to asset transfers, including profit shifting, of a temporary nature where the assets are intended to revert to the Member State of the transferor, although the Member State may levy witholding tax on the total value of the assets transferred. The taxpayer shall be entitled to claim repayment of the deduction once it has certified that the assets temporarily transferred, including profits, have reverted.
Amendment 183 #
Proposal for a directive
Article 6 – paragraph 1
Article 6 – paragraph 1
1. Member States shall not exempt a taxpayer from tax on foreign income which 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 or as income from a permanent establishment situated in a third country where the entity or the permanent establishment is subject, in the entity’s country of residence or the country in which the permanent establishment is situated, to a tax on profits at a statutory corporate tax rate lower than 4025 percent of the statutory tax rate that would have been charged under the applicable corporate tax system in the Member State of the taxpayer. In those circumstances, the taxpayer shall be subject to tax on the foreign income with a deduction of the tax paid in the third country from its tax liability in its state of residence for tax purposes. The deduction shall not exceed the amount of tax, as computed before the deduction, which is attributable to the income that may be taxed.
Amendment 207 #
Proposal for a directive
Article 8 – paragraph 1 – point b
Article 8 – paragraph 1 – point b
(b) under the general regime in the country of the entity, profits are subject to an effective corporate tax rate lower than 4025 percent of the effective tax rate that would have been charged under the applicable corporate tax system in the Member State of the taxpayer;
Amendment 212 #
Proposal for a directive
Article 8 – paragraph 1 – point d
Article 8 – paragraph 1 – point d
Amendment 215 #
Proposal for a directive
Article 8 – paragraph 2 – subparagraph 2
Article 8 – paragraph 2 – subparagraph 2
Amendment 234 #
Proposal for a directive
Article 11 – paragraph 2
Article 11 – paragraph 2
2. Member States shall communicate to the Commission all information necessary for evaluating the implementation of this Directive, and, in particular, shall forward a detailed report every year which includes statistics on interest deductions, exit taxes, additional taxation of income earned abroad, non-genuine settlements and hybrid mismatches.