Activites

• 2017/07/06 Vote in plenary scheduled
• 2017/07/05 Debate in plenary scheduled
• 2017/06/14 Committee report tabled for plenary, 1st reading/single reading
  • A8-0225/2017 summary

    The Committee on Economic and Monetary Affairs adopted, following a special legislative procedure (Parliament’s consultation), the report by Michael THEURER (ALDE, DE) on the proposal for a Council directive on double taxation dispute resolution mechanisms in the European Union. The committee called on the European Parliament to approve the Commission proposal as amended. Double taxation represents one of the biggest obstacles to the Single Market as it creates barriers for cross-border investments. The report noted that attempts to eliminate double taxation have often led to "double non-taxation", where, through the practice of base erosion and profit shifting, companies have managed to have their profits taxed in those Member States which have corporate taxes of close to zero. That ongoing practice distorts competition. Furthermore, current dispute resolution procedures are too long, costly and often do not result in an agreement, with some cases receiving no acknowledgement at all. For this reason, it is essential that mechanisms available in the Union ensure an effective, rapid and enforceable resolution of double taxation disputes and the effective and timely elimination of the double taxation at stake, with regular and effective communication to the taxpayer. The main amendments are as follows: CCCTB: in order to shape a fair, clear and stable tax environment and to reduce taxation disputes within the internal market, at least some minimum convergence in corporate tax policies is required. Members considered that the introduction of a common consolidated corporate tax base (CCCTB) as proposed by the Commission is the most effective way of eliminating the risk of double corporate taxation. Stricter deadlines: the report stated that the competent authorities of the Member States concerned shall take a decision on the acceptance and admissibility of the complaint of a taxpayer within three months (as opposed to six) of the receipt of the complaint and inform that taxpayer and the competent authorities of the other Member States in writing of their decision within two weeks. In this regard, Member States should dedicate an adequate level of human, technical and financial resources. Sanctions: when a taxpayer submits a complaint requesting the resolution of the double taxation, Members considered that it is vital not to impose sanctions on the taxpayer in relation to the same matters until a binding decision is taken. Central contact point: in order to create a harmonised and transparent framework of the double taxation dispute resolution mechanisms, Members proposed that the Commission shall host a central contact point in all official languages of the Union, which is easily accessible to the public with up-to-date contact information for each competent authority and a full overview of applicable Union legislation and tax treaties. Review: the Commission shall review the application of this Directive after five years with regard to the possible extension of its scope to cover all cross-border double taxation situations and double non-taxation, and if appropriate, an amending legislative proposal.

• 2017/06/08 Vote in committee, 1st reading/single reading
• #3543
• 2017/05/23 Council Meeting
• 2017/03/01 Committee referral announced in Parliament, 1st reading/single reading
• 2016/10/25 Legislative proposal published
  • COM(2016)0686 summary

    PURPOSE: to establish an effective dispute resolution mechanism regarding double taxation for the proper functioning of 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: one of the main problems encountered by businesses operating across borders is double taxation. There are already mechanisms in place that deal with the resolution of double taxation disputes. These are the mutual agreement procedures that are provided in double taxation conventions (DTCs) entered into by Member States as well as in the Union Arbitration Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises. The Commission considers that these mechanisms should be improved with respect to access for taxpayers to those mechanisms, coverage, timeliness and conclusiveness. Moreover, the traditional methods of resolving disputes no longer fully fit with the complexity and risks of the current global tax environment. In its communication of June 2015 on an action plan for a fair and efficient corporate tax system in the EU, the Commission indicated that its proposal for a Common Consolidated Corporate Tax Base (CCCTB), which will be adopted on the same day as this proposal, is a major step towards a better tax environment for business. IMPACT ASSESSMENT: the preferred option is to set up a mandatory binding effective dispute resolution mechanism, i.e. a mutual agreement procedure combined with an arbitration phase, with a clear time limit and an obligation of result for all Member States. In terms of economic impact, the proposal will reduce the compliance and litigation burden for companies operating in the EU as regards their cross-border activities. CONTENT: the draft directive aims to improve existing double taxation dispute resolution mechanisms in the EU in order to establish a fair and efficient tax system that increases legal certainty. It focuses on business and companies, the main stakeholders affected by double taxation situations. It builds on the existing Union Arbitration Convention, which already provides for a mandatory binding arbitration mechanism, but broadens its scope to all cross-border situations subject to double income tax imposed on business profits. However, it adds an explicit obligation regarding results for Member States as well as a clearly defined time limit. On the other hand, situations that involve double non-taxation or cases of fraud, wilful default or gross-negligence are excluded. In line with the Union Arbitration Convention, the draft Directive allows for a Mutual Agreement Procedure, initiated by the complaint of the taxpayer, under which the Member States shall freely cooperate and reach an agreement on the double taxation dispute within 2 years. If the Mutual Agreement Procedure fails, it automatically leads to a dispute resolution procedure with the issuance of a final mandatory binding decision by the competent authorities of the Member States involved. BUDGETARY IMPLICATIONS: the estimated impact of the proposal on the Union budget is EUR 0.097 million (human resources and administrative expenditure). This will be met within available resources.

Documents

• Legislative proposal published: COM(2016)0686
• Committee report tabled for plenary, 1st reading/single reading: A8-0225/2017

History

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