Activites

• 2014/04/02 Decision by Parliament, 1st reading/single reading
  • T7-0275/2014 summary

    The European Parliament adopted by 513 votes to 32, with 81 abstentions, in the framework of a special legislative procedure (Parliament consultation), a legislative resolution on the proposal for a Council directive amending Directive 2011/96/EU on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States. Parliament approved the Commission proposal subject to the following amendments: Combating tax evasion: Parliament recalled that an estimated EUR 1 trillion of potential tax revenue is lost to tax fraud, tax evasion, tax avoidance or aggressive tax planning in the Union every year, representing an approximate cost of EUR 2 000 per annum for each Union citizen. It is therefore vital to take appropriate measures against tax fraud and to amend Council Directive 2011/96/EU in order to ensure that the application of that directive does not prevent effective action against double non-taxation in the area of hybrid loan structures. In its resolution of 21 May 2013 on Fight against Tax Fraud, Tax Evasion and Tax Havens, the European Parliament called on the Commission to put forward a proposal in 2013 to amend Directive 2011/96/EU with a view to revising the anti-abuse provision and eliminating double non-taxation, as facilitated by hybrid entities and financial instruments in the Union. Anti-abuse provision: in order to prevent tax avoidance and abuse through artificial arrangements, the report suggested adding a common, compulsory anti-abuse provision tailored to the purpose and objectives of Directive 2011/96/EU should be inserted. Application of domestic or agreement based provisions: it is stipulated that this Directive should not preclude the application of domestic or agreement-based provisions required in order to prevent tax evasion or to permit the taxation of activities at the place of production or consumption, in so far as they are compatible with this Directive. Artificial arrangement: in order to determine whether an arrangement or series of arrangements is artificial, Member States should ascertain, in particular, but not exclusively, whether they involve one or more of the following situations outlined in the Directive. Parent company: by derogation of the provisions of the Directive, Member States should be able to add, by means of bilateral agreement, the criterion of a holding in the capital by that of a holding of voting rights. Review: by 31 December 2016, the Commission should report to the European Parliament and the Council reviewing the operation of this Directive and in particular its effectiveness in preventing tax avoidance and abuse. The report should be submitted together with a legislative proposal, if appropriate.

• 2014/03/24 Committee report tabled for plenary, 1st reading/single reading
  • A7-0243/2014 summary

    The Committee on Economic and Monetary Affairs adopted the report, in the framework of a special legislative procedure (Parliament consultation), the report by Mojca KLEVA KEKUŠ (S&D, SI) on the proposal for a Council directive amending Directive 2011/96/EU on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States. The committee approved the Commission proposal subject to the following amendments: Combating tax evasion: Members recalled that an estimated EUR 1 trillion of potential tax revenue is lost to tax fraud, tax evasion, tax avoidance or aggressive tax planning in the Union every year, representing an approximate cost of EUR 2 000 per annum for each Union citizen. It is therefore vital to take appropriate measures against tax fraud and to amend Council Directive 2011/96/EU in order to ensure that the application of that directive does not prevent effective action against double non-taxation in the area of hybrid loan structures. In order to prevent tax avoidance and abuse through artificial arrangements, the report suggested adding a common, compulsory anti-abuse provision tailored to the purpose and objectives of Directive 2011/96/EU should be inserted. It is stipulated that this Directive should not preclude the application of domestic or agreement based provisions required in order to prevent tax evasion or to permit the taxation of activities at the place of production or consumption, in so far as they are compatible with this Directive. Parent company: by derogation of the provisions of the Directive, Member States should be able to add, by means of bilateral agreement, the criterion of a holding in the capital by that of a holding of voting rights. Review: by 31 December 2016, the Commission should report to the European Parliament and the Council reviewing the operation of this Directive and in particular its effectiveness in preventing tax avoidance and abuse. The report should be submitted together with a legislative proposal, if appropriate.

• 2014/03/18 Vote in committee, 1st reading/single reading
• 2014/01/13 Committee referral announced in Parliament, 1st reading/single reading
• 2013/11/25 Legislative proposal published
  • COM(2013)0814 summary

    PURPOSE: to prevent fraud and tax evasion through artificial arrangements and thus fight against corporate base erosion. PROPOSED ACT: Council Directive. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUD: Directive 2011/96/EU on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (PSD) exempts dividends and other profit distributions paid by subsidiary companies to their parent companies from withholding taxes and eliminates double taxation of such income at the level of the parent company. The Commission considers, however, that the benefits of Directive 2011/96/EU should not lead to situations of double non-taxation and, therefore, generate unintended tax benefits for groups of parent companies and subsidiaries of different Member States in comparison with groups of companies of the same Member State. Double non-taxation resulting from hybrid financial instruments deprives Member States of significant revenues and creates unfair competition between businesses in the Single Market. Hybrid loan arrangements are financial instruments that have characteristics of both debt and equity. Due to different tax qualifications given by Member States to hybrid loans, payments under a cross border hybrid loan are treated as a tax deductible expense in one Member State (the Member State of the payer) and as a tax exempt distribution of profits in the other Member State (the Member State of the payee), thus resulting in an unintended double non-taxation. To solve the issue, the Code of Conduct Group agreed guidance, which cannot be safely implemented under Directive 2011/96. However, double non-taxation is one of the key areas for urgent and coordinated action to be taken in the EU: ·        The Action Plan to strengthen the fight against tax fraud and tax evasion adopted by the Commission on 6 December 2012 identifies tackling mismatches between tax systems as one of the actions to be undertaken in the short term (in 2013). It also announced a review of anti-abuse provisions in the corporate tax directives, including PSD, with a view to implement the principles underlying its Recommendation on aggressive tax planning. In a resolution adopted on 21 May 2013, the European Parliament called on the Commission to: (i) address the problem of hybrid mismatches between the different tax systems used in the Member States; (ii) present in 2013 a proposal for the revision of the PSD with a view to revise the anti-abuse clause and to eliminate double non-taxation in the EU as facilitated by hybrid arrangements. IMPACT ASSESSMENT: the impact assessment found that counteracting double non-taxation deriving from hybrid financial arrangements and aggressive tax planning will have a positive impact on the tax revenue of Member States.  With regard to hybrid loan mismatches, the impact assessment found that the best option is to deny the tax exemption in the PSD to profit distribution payments that are deductible in the source Member State. The assessment also found that the most effective option would be to update the current anti-abuse provisions of the PSD and make it obligatory for Member States to adopt the common anti-abuse rule. CONTENT: the proposal seeks to tackle hybrid financial mismatches within the scope of application of Directive 2011/96/EU (PSD) and to replace the current anti-abuse provisions with a general anti-abuse rule, based on the similar clause included in the Recommendation on aggressive tax planning. To counteract double non-taxation deriving from mismatches in the tax treatment of profit distributions between Member States, the Member State of the parent company and the Member State of its permanent establishment should not allow those companies to benefit from the tax exemption applied to received distributed profits, to the extent that such profits are deductible by the subsidiary of the parent company.

  • DG {'url': 'http://ec.europa.eu/taxation_customs/index_en.htm', 'title': 'Taxation and Customs Union'}, ŠEMETA Algirdas

Documents

• Legislative proposal published: COM(2013)0814
• Committee report tabled for plenary, 1st reading/single reading: A7-0243/2014
• Decision by Parliament, 1st reading/single reading: T7-0275/2014

Amendments

Dossier

25

2013/0400(CNS) 2014/01/30 JURI 6 amendments... Amendment 10 # Sebastian Valentin BODU Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2011/96/EU Article 1 – paragraph 2 – point 2 a (new) In all cases, if the agreement consists of a commercial transaction, even where the parties are part of the same corporate group, the economic substance of the transaction shall prevail over the tax advantage within the meaning of this Directive. Amendment 11 # Sebastian Valentin BODU Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2011/96/EU Article 1 – paragraph 2 – point 2 c the arrangement includes elements which have the effect of offsetting or cancelling each other;deleted Amendment 6 # Dimitar STOYANOV Proposal for a directive Recital 1 a (new) (1а) An estimated EUR 1 000 000 000 000 of potential tax revenue is lost to tax fraud, tax evasion, tax avoidance and aggressive tax planning every year in the EU, representing an approximate cost of EUR 2000 per European citizen per year. In response, it is therefore vital to adopt an action plan against tax fraud and to introduce a legislative amendment to Council Directive 2011/96/EU in order to ensure that the application of the directive does not prevent effective action against double non-taxation in the area of hybrid loan structures. Amendment 7 # Dimitar STOYANOV Proposal for a directive Article 1 – paragraph 1 – point 1 a (new) 1а. Review One year after the transposition date of this Directive, the Commission shall report to the European Parliament and the Council reviewing the operation of this Directive and in particular its effectiveness in preventing tax avoidance, fraud and abuse. The report shall be submitted together with a specific proposal for legislation. Amendment 8 # Sebastian Valentin BODU Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2011/96/EU Article 1 – paragraph 2 Member States shall withdraw the benefit of this directive in the case of an artificial arrangement or an artificial series of arrangements which has been put into place for the essentialsole purpose of obtaining an improper tax advantage under this directive and which defeats the object, spirit and purpose of the tax provisions invokedis based on an artificial transaction carried out for the sole purpose of obtaining such an advantage. Amendment 9 # Sebastian Valentin BODU Proposal for a directive Article 1 – paragraph 1 – point 2 Directive 2011/96/EU Article 1 – paragraph 2 – point 2 a the legal characterisation of the individual steps which an arrangement consists of is inconsistent with the legaleconomic substance of the arrangement as a whole; source: PE-528.035 2014/02/28 ECON 19 amendments... Amendment 12 # Jürgen KLUTE Draft legislative resolution Paragraph 2 a (new) 2a. Considers the principle of physical presence, the separate entity approach and the Arm's Length Principle not to be appropriate for a fair and just taxation of enterprises with economic activities in more than one country, therefore calls on the Council to prepare the introduction of a unitary taxation with formula based apportionment of taxes in order to prevent tax evasion in the Union by taking advantage of mismatching tax regimes of the Member States; Amendment 13 # Jürgen KLUTE Draft legislative resolution Paragraph 2 b (new) 2b. Is concerned about the aggressive tax planning of transnational corporations including companies with headquarters in Member States; many of these companies are evading a fair taxation not only in Member States but also in countries with weaker economies which, due to these tax losses, cannot afford to fight poverty or to pay for public services; therefore asks the Commission and the Member States to contribute to the effort done by the OECD on international taxation and the prevention of tax evasion; especially asks the Commission and the Member States to contribute to a swift introduction of a global system of unitary taxation and other suitable measures to prevent tax evasion inside the Union and globally; Amendment 14 # Jürgen KLUTE Draft legislative resolution Paragraph 2 c (new) 2c. Asks the Commission to provide a report on how a unitary taxation of corporations providing business in more than one Member State can be introduced in the Union; Amendment 15 # Jürgen KLUTE Draft legislative resolution Paragraph 2 d (new) 2d. Is aware of the fact that a huge part of tax evasion in the Union is a result of skilfully exploiting the mismatches of taxation in different Member States and their respective Double Tax Treaties for example regarding the treatment of permanent establishments; therefore asks the Member States to find a common approach to taxation of companies providing business in more than one Member State; in particular asks the Member States to coordinate their respective double tax treaties in order to tackle tax evasion and avoidance; Amendment 16 # Jürgen KLUTE Draft legislative resolution Paragraph 2 e (new) 2e. Asks the Member States to consider the taxation of companies with economic activities in more than one Member State on Union level; the revenues of such taxation could partly contribute to the strengthening of Union own funds, however a higher proportion should be apportioned between the Member States; Amendment 17 # Philippe LAMBERTS Proposal for a directive Recital 2 (2) The benefits of Directive 2011/96/EU should nothave lead to situations of double non- taxation andi.e. very low or zero effective tax rates, therefore, generated unintended tax benefits for groups of parent companies and subsidiaries of different Member States in comparison with groups of companies of the same Member State. Amendment 18 # Philippe LAMBERTS Proposal for a directive Recital 4 (4) In order to prevent large scale tax avoidance and abuse through artificial arrangements that contribute significantly to the erosion of the tax base of Member States and hence greatly affect their capacity to finance public goods which in turn threatens social cohesion, a common anti-abuse provision tailored to the purpose and objectives of Directive 2011/96/EU should be inserted. Amendment 19 # Jean-Pierre AUDY Proposal for a directive Article 1 – point 1 Directive 2011/96/UE Article 1 – paragraph 2 2. This Directive shall not preclude the application of domestic or agreement- based provisions required for the prevention of tax evasin order to prevent tax evasion or permit the taxation of activities at the place of production or consumption. Amendment 20 # Jürgen KLUTE Proposal for a directive Article 1 – point 2 Directive 2011/96/EU Article 1 a – paragraph 2 – subparagraph 2 In determining whether an arrangement or series of arrangements is artificial, Member States shall ascertain, in particular but not exclusively, whether they involve one or more of the following situations: Amendment 21 # Jürgen KLUTE Proposal for a directive Article 1 – point 2 Directive 2011/96/EU Article 1 a – paragraph 2 – point e a (new) (ea) the ratio between economic characteristics like payroll, number of employees, sales promotion on the one hand and turnover or profit on the other in one Member State is disproportionate to the respective ratio in one or several other Member States of enterprises which are part of a corporation with economic activity in more than one Member State. Amendment 22 # Philippe LAMBERTS Proposal for a directive Article 1 – point 3 Directive 2011/96/EU Article 4 – paragraph 1 – point a (a) refrain from taxing such profits to the extent that such profits are not deductible by the subsidiary of the parent company; ordeleted Amendment 23 # Jürgen KLUTE Proposal for a directive Article 1 – point 3 Directive 2011/96/EU Article 4 – paragraph 1 – point a (a) refrain from taxing such profits to the extent that such profits are not deductible by the subsidiary of the parent company; ordeleted Amendment 24 # Sylvie GOULARD Proposal for a directive Article 1 – point 3 Directive 2011/96/EU Article 4 – paragraph 1 – point a (a) refrain from taxing such profits to the extent that such profits are not deductible by the subsidiary of the parent company, provided that they have been taxed in the country of the subsidiary at an effective corporate tax rate not lower than 75 % of the average effective corporate tax rate applicable in the Member States; or Amendment 25 # Jürgen KLUTE Proposal for a directive Article 1 – point 3 a (new) Directive 2011/96/EU Article 4 – paragraph 1 – point b (b) tax such profit3a. In Article 4(1), point (b) is replaced by the following: "(b) tax such profits at a statutory corporate tax rate not lower than 90 % of the average statutory corporate tax rate applicable in the Member States while authorising the parent company and the permanent establishment to deduct from the amount of tax due that fraction of the corporation tax related to those profits and paid by the subsidiary and any lower-tier subsidiary, subject to the condition that at each tier a company and its lower-tier subsidiary fall within the definitions laid down in Article 2 and meet the requirements provided for in Article 3, up to the limit of the amount of the corresponding tax due." Amendment 26 # Sylvie GOULARD Proposal for a directive Article 1 – point 3 a (new) Directive 2011/96/EU Article 4 – paragraph 1 – point b (b) tax such profits3a. In Article 4(1), point (b) is replaced by the following: "(b) tax such profits at an effective corporate tax rate not lower than 75 % of the average effective corporate tax rate applicable in the Member States, while authorising the parent company and the permanent establishment to deduct from the amount of tax due that fraction of the corporation tax related to those profits and paid by the subsidiary and any lower-tier subsidiary, subject to the condition that at each tier a company and its lower-tier subsidiary fall within the definitions laid down in Article 2 and meet the requirements provided for in Article 3, up to the limit of the amount of the corresponding tax due." Amendment 27 # Philippe LAMBERTS Proposal for a directive Article 1 – point 3 a (new) Directive Article 5 Profits which a subsidiary distributes to its parent company shall be exempt from withholding tax.3a. Article 5 shall be deleted Article 5 Amendment 28 # Jürgen KLUTE Proposal for a directive Article 1 – point 3 b (new) Directive 2011/96/EU Article 5 Profits which a subsidiary distributes to its parent company shall be exempt from withholding tax.3b. Article 5 shall be deleted Article 5 Amendment 29 # Philippe LAMBERTS Proposal for a directive Article 2 – paragraph 1 – subparagraph 1 Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December0 June 2014 at the latest. They shall forthwith communicate to the Commission the text of those provisions. Amendment 30 # Jean-Pierre AUDY Proposal for a directive Article 3 – paragraph 1 This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall be published in consolidated form with the Directive which it amends within three months of its publication. source: PE-529.823

History

(these mark the time of scraping, not the official date of the change)