Awaiting committee decision
Next event: Vote scheduled in committee, 1st reading/single reading 2018/02/21 more...
- Indicative plenary sitting date, 1st reading/single reading 2018/01/16
Role | Committee | Rapporteur | Shadows |
---|---|---|---|
Lead | ECON | TANG Paul (S&D) | FERBER Markus (EPP), LOONES Sander (ECR), JEŽEK Petr (ALDE), CARTHY Matt (GUE/NGL), DE MASI Fabio (GUE/NGL), JOLY Eva (Verts/ALE), VALLI Marco (EFD), KAPPEL Barbara (ENF) |
Opinion | IMCO | ||
Opinion | JURI | REGNER Evelyn (S&D) |
Legal Basis TFEU 115
Activites
-
2018/02/21
Vote scheduled in committee, 1st reading/single reading
-
2018/01/16
Indicative plenary sitting date, 1st reading/single reading
- #3543
- 2017/05/23 Council Meeting
- #3506
- 2016/12/06 Council Meeting
-
2016/11/24
Committee referral announced in Parliament, 1st reading/single reading
-
2016/10/25
Legislative proposal published
-
COM(2016)0685
summary
PURPOSE: to present a re-launched proposal on a Common Corporate Tax Base to ensure a corporate tax system that encourages growth and fairness in the internal market. PROPOSED ACT: Council Directive. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting Parliament but without being obliged to follow the latter’s opinion. BACKGROUND: currently, businesses with cross-border activity have to comply with up to 28 divergent corporate tax systems. Generally, corporate income is taxed at national level, but the economic environment has become more globalised, mobile and digital. Business models and corporate structures are more complex, making it easier to shift profits. In March 2011, the Commission proposed a directive for a Common Consolidated Corporate Tax Base (CCCTB). The proposal, which is still pending in Council, aims to provide companies with a single set of corporate tax rules for doing business across the internal market, thereby facilitating their cross-border activity. The discussions in Council since 2011 have shown that the CCCTB proposal is unlikely to get adopted, in its entirety, without a staged approach. The Commission, in its action plan of June 2015, advocated a step-by-step approach to the CCCTB. 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, the Commission considers it necessary to divide the ambitious CCCTB initiative into two separate proposals. It proposes, at a first stage, rules on a common corporate tax base before addressing, at a second stage, the issue of consolidation. This proposal for a Directive focuses on the 'first step' of the staged approach. It is thus limited to the elements of the common base, i.e. the rules for calculating the corporate tax base. Consolidation will be addressed in a separate proposal for a directive (i.e. second step), due for examination at a second stage, i.e. after the elements of the common base have politically been agreed. Until then, the 2011 proposal for a CCCTB will remain pending for examination in Council. The Commission will submit the two proposals, i.e. for a common corporate tax base and a CCCTB, simultaneously and as part of a single initiative. The proposal of 2011 will be withdrawn at the same time as the Commission adopts the new proposals. This initiative on re-launching the CCCTB features prominently in the Commission’s larger project in the field of fairer taxation. It will be presented at the same time as the proposal for a directive on hybrid mismatches involving third countries (which will amend the Directive tax avoidance) and a directive on dispute settlement. IMPACT ASSESSMENT: the main policy option that has been considered is a proposal for a common consolidated corporate tax base, but the implications of the first stage without consolidation have also been assessed. A key choice to be made relates to the scope of such a tax base, i.e. to whom it would apply. Valuing the different options has led to a preferred option: a CCCTB mandatory for large companies, equipped with an 'Allowance for Growth and Investment' and with an allowance for R&D expenses. With regard to the economic benefits, a common corporate tax base with cross-border loss relief and an allowance for growth and investment would lead to an increase in investment and employment of up to 3.6% and 0.5%, respectively. Overall, growth would increase by up to 1.3%. CONTENT : this proposal is the 'first step' (common corporate tax base) in a 2-stage approach towards an EU-wide corporate tax system and lays down common corporate tax rules for computing the tax base of companies and permanent establishments in the Union. The current initiative includes points that were not in the 2011 proposal: Scope: in contrast to the proposal of 2011, which laid down an optional system for all, this proposal will be mandatory for groups of companies beyond a certain size (whose consolidated turnover is above EUR 750 million). Furthermore, to reach a degree of coherence between the two steps (i.e. common corporate tax base and CCCTB), companies will be required to meet the conditions for consolidation in order to fall within the mandatory scope of the common base. These common rules will also be available, as an option, for the companies that do not comply with these conditions. Tax base: this is designed broadly. All revenues will be taxable unless expressly exempted. Income consisting in dividends or proceeds from the disposal of shares held in a company outside the group will be exempt for participations of at least 10%, in order to prevent the double taxation of foreign direct investment. In the same vein, the profits of permanent establishments will also be exempt from tax in the state of the head office. Taxable revenues will be reduced by business expenses and certain other items. To support innovation in the economy, this re-launched initiative introduces a super-deduction for research and development costs into the R&D regime set out in the proposal of 2011. In addition, taxpayers will be entitled, for R&D expenditure up to EUR 20 000 000, to a yearly extra super-deduction of 50%. To the extent that R&D expenditure go beyond EUR 20 000 000, taxpayers may deduct 25% of the exceeding amount. The proposal will also grant an enhanced super-deduction for small starting companies without associated enterprises, which are particularly innovative (a category that will in particular cover start-ups). Interest limitation rule: this new rule (not in the proposal of 2011) features in the Anti-Tax Avoidance Directive. It limits the deductibility of interest (and other financial) costs, in order to discourage practices of profit shifting towards low-tax countries. Allowance for Growth and Investment: the proposal aims to tackle the asymmetry whereby interest paid out on loans is deductible (subject to some limits) from taxpayers' common base whilst this is not the case for profit distributions. This is a definitive advantage in favour of financing through debt as opposed to equity. Given the risks that such a situation entails for the indebtedness of companies, the proposal includes a rule against debt bias. Taxpayers will be given an allowance for growth and investment according to which increases in their equity will be deductible from their taxable base subject to certain conditions, such as measures against potential cascading effects and anti-tax avoidance rules. DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the European Union.
- DG {'url': 'http://ec.europa.eu/info/departments/taxation-and-customs-union_en', 'title': 'Taxation and Customs Union'}, MOSCOVICI Pierre
-
COM(2016)0685
summary
Documents
- Legislative proposal published: COM(2016)0685
- Debate in Council: 3506
- Debate in Council: 3543
Amendments | Dossier |
35 |
2016/0337(CNS)
2017/05/15
JURI
35 amendments...
Amendment 26 #
Proposal for a directive Recital 1 (1)
Amendment 27 #
Proposal for a directive Recital 1 (1) Companies which seek to do business across frontiers within the Union encounter serious obstacles and market distortions owing to the existence and interaction of 28 disparate corporate tax systems. Furthermore, tax planning structures have become ever-more
Amendment 28 #
Proposal for a directive Recital 1 (1) Companies which seek to do business across frontiers within the Union encounter serious obstacles and market distortions owing to the existence and interaction of 28 disparate corporate tax systems. Furthermore, tax planning structures have become ever-more sophisticated over time, as they develop across various jurisdictions and effectively take advantage of the technicalities of a tax system or of mismatches between two or more tax systems for the purpose of reducing the tax liability of companies. Although those situations highlight shortcomings that are completely different in nature, they both create obstacles which impede the proper functioning of the
Amendment 29 #
Proposal for a directive Recital 1 (1) Companies which seek to do business across frontiers within the Union encounter serious obstacles and market distortions owing to the existence and interaction of 28 disparate corporate tax systems. Furthermore, tax planning structures have become ever-more aggressive and sophisticated over time, as they develop across various jurisdictions and effectively take advantage of the technicalities of a tax system or of mismatches between two or more tax systems for the purpose of reducing the tax liability of companies. Although those situations highlight shortcomings that are completely different in nature, they both create obstacles which impede the proper functioning of the internal market. Action to rectify those problems should therefore address both types of market deficiencies.
Amendment 30 #
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. A corporate tax system which treats the Union as a single market for the purpose of computing the corporate tax base of companies would increase transparency of activities of multinational enterprises and enable the public to assess their impact on the economy. It is therefore necessary to provide for mechanisms that
Amendment 31 #
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
Amendment 32 #
Proposal for a directive Recital 4 a (new) (4a) In this way, the CCCTB is in line with Commission efforts to achieve fairer and more effective taxation, being largely complementary to EU company law; it is also is broadly in line with projects such as the Capital Markets Union and efforts to ensure tax transparency, promote the exchange of information and combat money laundering.
Amendment 33 #
Proposal for a directive Recital 5 (5)
Amendment 34 #
Proposal for a directive Recital 5 (5) Many aggressive tax planning structures tend to feature in a cross-border context, which implies that the
Amendment 35 #
Proposal for a directive Recital 6 (6) It is necessary to define the concept of a permanent establishment situated in the Union and belonging to a taxpayer who is resident for tax purposes within the Union. The aim would be to ensure that all concerned taxpayers share a common understanding and to exclude the possibility of a mismatch due to divergent definitions.
Amendment 36 #
Proposal for a directive Recital 6 (6) It is necessary to define the concept of a permanent establishment situated in the Union and belonging to a taxpayer who is resident for tax purposes within the Union, and to extend it to include the concept of ‘virtual establishment’, in order to cover non-resident taxpayers in the Union, all or part of whose turnover is installed in a fixed manner in one or more Member States, without their having a physical establishment. The aim would be to ensure that all concerned taxpayers share a common understanding and to exclude the possibility of a mismatch due to divergent definitions. On the contrary, it should not be seen as essential to have a common definition of permanent establishments situated in a third country, or in the Union but belonging to a taxpayer who is resident for tax purposes in a third country. This dimension should better be left to bilateral tax treaties and national law due to its complicated interaction with international agreements.
Amendment 37 #
Proposal for a directive Recital 6 a (new) (6a) Given the digital change in the business environment, it is necessary to define and implement the concept of a ‘digital business establishment’. Companies that generate profits in a Member State without having a physical establishment there should be treated in the same way as companies that do have a physical establishment in that Member State. Therefore, the CCCTB should also apply to digital corporations.
Amendment 38 #
Proposal for a directive Recital 8 (8) Taxable revenues should be reduced by business expenses and certain other items
Amendment 39 #
Proposal for a directive Recital 10 Amendment 40 #
Proposal for a directive Recital 14 (14) To avoid the base erosion of higher tax jurisdictions through shifting profits via inflated transfer prices towards lower tax countries, transactions between a taxpayer and its associated enterprise(s) should be subject to pricing adjustments in line with the 'arm's length' principle, which is a generally applied criterion. In this way, loopholes between national tax systems, in particular transfer pricing, which accounts for around 70% of all profit shifting in the EU, could be eliminated and a major step taken towards a fair, efficient and transparent tax system.
Amendment 41 #
Proposal for a directive Recital 21 (21) Since the objectives of this Directive, namely to improve the functioning of the internal market through countering practices of international tax avoidance and to facilitate businesses in expanding across borders within the Union, cannot be sufficiently achieved by the Member States acting individually and in a disparate fashion because coordinated action is necessary to obtain these objectives, but can rather, by reason of the fact that the Directive targets inefficiencies of the internal market that originate in the interaction between disparate national tax rules which impact on the internal market and discourage cross-border activity, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in
Amendment 42 #
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, including certain provisions regarding measures to prevent tax avoidance and on the international dimension of the proposed tax system.
Amendment 43 #
Proposal for a directive Article 1 – paragraph 2 2. A company that applies the rules of this Directive
Amendment 44 #
Proposal for a directive Article 2 – paragraph 1 – introductory part 1. The rules of this Directive shall apply to a company that is established under the laws of a Member State, including its permanent establishments in other Member States and digital business establishments, where the company meets all of the following conditions:
Amendment 45 #
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 (or equivalent in domestic currency) during the
Amendment 46 #
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
Amendment 47 #
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
Amendment 48 #
Proposal for a directive Article 2 – paragraph 2 – subparagraph 1 This Directive shall also apply to a company that is established under the laws of a third country in respect of its permanent establishments situated in one or more Member State and of the turnover installed in a fixed manner in one or more Member States where the company meets the conditions laid down in points (b) to (d) of paragraph 1.
Amendment 49 #
Proposal for a directive Article 2 – paragraph 2 – subparagraph 1 This Directive shall also apply to a company that is established under the laws of a third country in respect of its permanent establishments situated in one or more Member State, and with regard to income earned in a Member State, where the company meets the conditions laid down in points (b) to (d) of paragraph 1.
Amendment 50 #
Proposal for a directive Article 2 – paragraph 2 a (new) 2a. This Directive shall also apply to businesses established under the laws of a third country in respect of their digital business establishments that are specifically directed towards consumers or businesses in a Member State or that principally receive their revenue from activity in a Member State, where the business meets the conditions laid down in points (b) to (d) of paragraph 1. For the purpose of ascertaining whether a digital establishment is specifically directed towards consumers or businesses in a Member State, the physical locations of the consumers or users and suppliers of the goods and services provided shall be taken into account, in accordance with the OECD’s BEPS Action 1. If these cannot be ascertained, regard shall be had to whether the establishment is conducting its business under the top level domain of the Member State or of the Union or, in relation to mobile- application-based businesses, is distributing its application via the Member State-specific part of a mobile application distribution centre or whether the business is conducted under a domain which – for example as a result of the use of names of Member States, regions or towns – makes it clear that the establishment is directed towards consumers or businesses in a Member State, or the business activity is subject to General Terms and Conditions applicable specifically for the European Union or a Member State, or the web presence of the business provides advertising space specifically aimed at consumers and businesses in a Member State.
Amendment 51 #
Proposal for a directive Article 4 – paragraph 1 – subparagraph 1 – point 33 a (new) (33a) ‘digital establishment’ means - as defined by the OECD’s BEPS Action 1 - an establishment which is specifically directed towards consumers or businesses in a Member State, with due regard for the physical locations of the consumers or users and of suppliers of the goods and services provided. If these cannot be ascertained, regard shall be had to whether the establishment is conducting its business under the top level domain of the Member State or of the Union or, in relation to mobile-application-based businesses, is distributing its application via the Member State-specific part of a mobile application distribution centre or whether the business is conducted under a domain which – for example as a result of the use of names of Member States, regions or towns – makes it clear that the establishment is directed towards consumers or businesses in a Member State, or the business activity is subject to General Terms and Conditions applicable specifically for the European Union or a Member State, or the web presence of the business offers advertising space specifically aimed at consumers and businesses in a Member State.
Amendment 52 #
Proposal for a directive Article 4 – paragraph 1 – subparagraph 1 – point 33 a (new) (33a) ‘digital business establishment’ means an establishment specifically directed towards consumers and businesses in a Member State and, to that end, account shall be taken of whether the activity is being carried out in the top level domain of the Member State or of the Union and whether mobile applications are being distributed through part of a distribution centre specifically intended for that purpose in the Member State concerned.
Amendment 53 #
Proposal for a directive Article 5 – paragraph 1 – introductory part 1. A taxpayer shall be considered to have a permanent establishment in a Member State other than the Member State in which it is resident for tax purposes when it has a fixed or virtual place in that other Member State through which it carries on its business, wholly or partly, including in particular:
Amendment 54 #
Proposal for a directive Article 5 – paragraph 1 – point f a (new) (fa) a digital business establishment.
Amendment 55 #
Proposal for a directive Article 9 – paragraph 3 Amendment 57 #
Proposal for a directive Article 12 – paragraph 1 – point j a (new) (ja) expenses to beneficiaries situated in countries listed on the European list of non-cooperative tax jurisdictions (tax havens)1a; __________________ 1a See the European list of non- cooperative tax jurisdictions currently being developed by the Council: http://data.consilium.europa.eu/doc/docu ment/ST-14166-2016-INIT/en/pdf
Amendment 58 #
Proposal for a directive Article 59 – paragraph 3 – subparagraph 2 Financial undertakings shall not be treated as controlled foreign companies under paragraph 1 where not more than one third of the income accruing to the entity or permanent or digital business establishment from categories (a) to (f) of paragraph 2 comes from
Amendment 59 #
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 the European Parliament on the operation of this Directive.
Amendment 60 #
Proposal for a directive Article 71 – paragraph 1 – subparagraph 1 Member States
source: 604.720
|
History
(these mark the time of scraping, not the official date of the change)
activities/5/date |
Old
2017-12-04T00:00:00New
2018-02-21T00:00:00 |
activities/5/date |
Old
2017-12-11T00:00:00New
2018-01-16T00:00:00 |
links/Research document |
|
activities/0/commission/0 |
|
other/1 |
|
activities/3 |
|
other/0 |
|
activities/3/date |
Old
2017-11-20T00:00:00New
2017-12-04T00:00:00 |
activities/4 |
|
activities/0/docs/0/celexid |
CELEX:52016PC0685:EN
|
activities/0/docs/0/celexid |
CELEX:52016PC0685:EN
|
activities/1/committees/0/shadows/5 |
|
activities/3 |
|
committees/0/shadows/5 |
|
activities/1/committees/0/shadows/6 |
|
committees/0/shadows/6 |
|
activities/1/committees/0/shadows/3 |
|
activities/1/committees/0/shadows/4 |
|
committees/0/shadows/3 |
|
committees/0/shadows/4 |
|
activities/1/committees/0/shadows/3 |
|
committees/0/shadows/3 |
|
activities/1/committees/0/date |
2016-11-24T00:00:00
|
activities/1/committees/0/rapporteur |
|
activities/1/committees/0/shadows/2 |
|
committees/0/date |
2016-11-24T00:00:00
|
committees/0/rapporteur |
|
committees/0/shadows/2 |
|
activities/1/committees/0/shadows/0 |
|
committees/0/shadows/0 |
|
activities/1/committees/0/shadows |
|
committees/0/shadows |
|
activities/2 |
|
activities/1/committees/2/date |
2016-11-28T00:00:00
|
activities/1/committees/2/rapporteur |
|
committees/2/date |
2016-11-28T00:00:00
|
committees/2/rapporteur |
|
activities/1 |
|
procedure/dossier_of_the_committee |
ECON/8/08276
|
procedure/stage_reached |
Old
Preparatory phase in ParliamentNew
Awaiting committee decision |
activities/0/docs/0/text |
|
procedure/Mandatory consultation of other institutions |
Economic and Social Committee
|
procedure/Mandatory consultation of other institutions |
Economic and Social Committee
|
committees/2 |
|
activities/0/docs/0/celexid |
CELEX:52016PC0685:EN
|
activities |
|
committees |
|
links |
|
other |
|
procedure |
|