2021/0433(CNS) Minimum level of taxation for multinational groups
Next event: Indicative plenary sitting date 2022/06/06
Lead committee dossier:
Next event: Indicative plenary sitting date 2022/06/06
Progress: Awaiting committee decision
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Lead | ECON |
LALUCQ Aurore ( S&D)
|
NIEDERMAYER Luděk ( EPP),
BOYER Gilles ( Renew),
GRUFFAT Claude ( Verts/ALE),
BECK Gunnar ( ID),
JURZYCA Eugen ( ECR),
GUSMÃO José ( GUE/NGL)
|
Lead committee dossier:
Legal Basis:
TFEU 115
Legal Basis:
TFEU 115Subjects
Events
2022/06/06
Indicative plenary sitting date
2022/04/28
Vote scheduled in committee
2022/03/30
EP - Amendments tabled in committee
Documents
2022/03/14
EP - Committee draft report
Documents
2022/02/14
EP - Committee referral announced in Parliament
2022/01/25
EP - LALUCQ Aurore (S&D) appointed as rapporteur in ECON
2021/12/22
EC - Document attached to the procedure
Documents
2021/12/22
EC - Legislative proposal published
Details
PURPOSE: to swiftly implement the international agreement on minimum taxation of multinationals to ensure a global minimum effective tax rate of 15% for large multinationals operating in the European Union.
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.
BACKGROUND: the anti-tax avoidance directives have laid down rules against the erosion of tax bases in the internal market and the shifting of profits out of the internal market. Those rules converted into Union law the recommendations made by the Organisation for Economic Cooperation and Development (OECD) in the context of the initiative against base erosion and profit shifting (BEPS) to ensure that profits of multinational enterprises (MNEs) are taxed where economic activities generating the profits are performed and where value is created.
The proposal delivers on the EU's pledge to move swiftly to implement the recent comprehensive tax reform agreement of the OECD and G20 inclusive framework agreed by 137 countries in October 2021 on a two-pillar solution to the tax challenges raised by the digitalisation of the economy, which aims to bring fairness, transparency and stability to the international corporate tax framework. The discussions centred around two main themes: Pillar 1, which deals with the partial reallocation of taxing rights, and Pillar 2, which concerns the minimum level of taxation of profits of multinational enterprises.
With the present proposal, the European Commission wishes to implement Pillar 2 of the Global Agreement . There is a political urgency to move forward with the project - i.e. to apply the OECD Model Rules in the EU from the beginning of 2023, as agreed by the Inclusive Framework.
CONTENT: the proposed directive sets out the method for calculating the effective tax rate by jurisdiction and includes clear and legally binding rules that will ensure that large groups operating in the EU pay a minimum rate of 15% for each jurisdiction in which they operate .
Scope
The proposed Directive will apply to any large group, both domestic and international, including the financial sector, with combined financial revenues of at least EUR 750 million a year in its consolidated financial statements in at least two of the last four consecutive fiscal years , and with either a parent company or a subsidiary situated in an EU Member State.
Governmental entities, international organisations, non-profit organisations, pension fund and investment funds are excluded from the scope of the Directive.
Calculation of the effective tax rate
The proposal provides that if the effective tax rate applicable to entities in a given jurisdiction is below the 15% minimum, then the group will have to pay a ‘ top-up ’ tax to bring its rate up to 15%. This top-up tax is known as the ‘ Income Inclusion Rule '. This top-up applies irrespective of whether the subsidiary is located in a country that has signed up to the international OECD/G20 agreement or not.
The effective tax rate is established per jurisdiction by dividing taxes paid by the entities in the jurisdiction by their income.
Groups established in a third country
The proposal also ensures effective taxation in cases where the parent company is located outside the EU in a low-tax country which does not apply equivalent rules. Member States would then apply the ‘ under-taxed payments rule ’, designed as a safety net to the primary income inclusion rule.
In practice, a Member State will collect the top-up tax due at the level of the entire group if some jurisdictions where entities are based impose tax below the minimum level and do not impose any domestic top-up tax.
Exemptions
In order to reduce compliance burdens in low-risk situations , an exclusion applies to minimal amounts of profit: the de minimis income exclusion . This is when profits of the MNE group’s constituent entities in a jurisdiction are below EUR 1 million and revenues below EUR 10 million. To reduce the impact on groups carrying out real economic activities, companies will be able to exclude an amount of income equal to 5% of the value of tangible assets and 5% of payroll .
Moreover, due to its highly volatile nature and the long economic cycle of this industry, the international shipping sector has traditionally been subject to alternative or supplementary tax regimes in Member States. The proposal therefore excludes income generated by this sector from the scope of application.
Special rules for mergers and acquisitions
The proposal contains special rules for mergers, acquisitions, joint ventures and certain multi-parented multinational enterprises. It provides for the application of a consolidated revenue threshold to group members in a merger or demerger situation.
Documents
Documents
- Amendments tabled in committee: PE730.002
- Committee draft report: PE719.752
- Document attached to the procedure: EUR-Lex
- Document attached to the procedure: SWD(2021)0580
- Legislative proposal published: EUR-Lex
- Legislative proposal published: COM(2021)0823
- Document attached to the procedure: EUR-Lex SWD(2021)0580
- Committee draft report: PE719.752
- Amendments tabled in committee: PE730.002
Activities
- Aurore LALUCQ
Plenary Speeches (2)
- Nicola BEER
Plenary Speeches (2)
- Jonás FERNÁNDEZ
Plenary Speeches (1)
- Maria GRAPINI
Plenary Speeches (1)
- Enikő GYŐRI
Plenary Speeches (1)
- Seán KELLY
Plenary Speeches (1)
- Georgios KYRTSOS
Plenary Speeches (1)
- Luděk NIEDERMAYER
Plenary Speeches (1)
- João PIMENTA LOPES
Plenary Speeches (1)
- Stanislav POLČÁK
Plenary Speeches (1)
- Evelyn REGNER
Plenary Speeches (1)
- Paul TANG
Plenary Speeches (1)
- Ernest URTASUN
Plenary Speeches (1)
- Sandra PEREIRA
Plenary Speeches (1)
- Manon AUBRY
Plenary Speeches (1)
- Gunnar BECK
Plenary Speeches (1)
- Marc BOTENGA
Plenary Speeches (1)
- José GUSMÃO
Plenary Speeches (1)
- Lefteris NIKOLAOU-ALAVANOS
Plenary Speeches (1)
- Ivan Vilibor SINČIĆ
Plenary Speeches (1)
- Mick WALLACE
Plenary Speeches (1)
- Billy KELLEHER
Plenary Speeches (1)
- Margarida MARQUES
Plenary Speeches (1)
- Lídia PEREIRA
Plenary Speeches (1)
- Eugen JURZYCA
Plenary Speeches (1)
- Antonio Maria RINALDI
Plenary Speeches (1)
- Engin EROGLU
Plenary Speeches (1)
- Andżelika Anna MOŻDŻANOWSKA
Plenary Speeches (1)
- Bert-Jan RUISSEN
Plenary Speeches (1)
- Marek BELKA
Plenary Speeches (1)
- Isabel BENJUMEA BENJUMEA
Plenary Speeches (1)
- Niels FUGLSANG
Plenary Speeches (1)
- Eugen TOMAC
Plenary Speeches (1)
- Martin HLAVÁČEK
Plenary Speeches (1)
- Jessica STEGRUD
Plenary Speeches (1)
- Antoni COMÍN I OLIVERES
Plenary Speeches (1)
- Salvatore DE MEO
Plenary Speeches (1)
- Claude GRUFFAT
Plenary Speeches (1)
- Chris MACMANUS
Plenary Speeches (1)
- Michiel HOOGEVEEN
Plenary Speeches (1)
Votes
Niveau minimum d'imposition pour les groupes multinationaux - Minimum level of taxation for multinational groups - Mindestbesteuerung für multinationale Unternehmensgruppen - A9-0140/2022 - Aurore Lalucq - Article 2, § 1 - Am 47 #
2022/05/19 Outcome: -: 364, +: 118, 0: 113
A9-0140/2022 - Aurore Lalucq - Article 2, § 3, point a - Am 48 #
2022/05/19 Outcome: -: 341, +: 129, 0: 122
A9-0140/2022 - Aurore Lalucq - Article 3, § 1, point 12 - Am 49 #
2022/05/19 Outcome: -: 354, 0: 126, +: 116
| FR | EL | ?? | MT | PT | CY | SI | FI | DK | LU | LV | HR | IE | AT | EE | SK | BE | LT | ES | BG | HU | CZ | NL | SE | RO | DE | IT | PL | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total |
62
|
16
|
1
|
3
|
19
|
5
|
6
|
8
|
10
|
6
|
8
|
11
|
13
|
15
|
7
|
13
|
18
|
9
|
50
|
13
|
17
|
19
|
27
|
20
|
25
|
76
|
70
|
49
|
|
| Verts/ALE |
64
|
France Verts/ALEFor (11) |
1
|
2
|
1
|
1
|
2
|
3
|
3
|
2
|
3
|
3
|
3
|
3
|
Germany Verts/ALEFor (11)Against (1) |
4
|
1
|
||||||||||||
 The Left |
33
|
4
|
Greece The LeftFor (6) |
4
|
2
|
1
|
1
|
4
|
1
|
Spain The LeftFor (5) |
1
|
1
|
1
|
2
|
|||||||||||||||
 NI |
35
|
1
|
3
|
1
|
2
|
2
|
1
|
Spain NIAbstain (1) |
Hungary NIAgainst (10) |
3
|
9
|
||||||||||||||||||
| S&D |
116
|
France S&D |
3
|
Portugal S&D |
1
|
1
|
2
|
1
|
2
|
3
|
4
|
2
|
2
|
3
|
1
|
Spain S&DAbstain (16)
Adriana MALDONADO LÓPEZ,
Alicia HOMS GINEL,
Clara AGUILERA,
Cristina MAESTRE MARTÍN DE ALMAGRO,
César LUENA,
Domènec RUIZ DEVESA,
Eider GARDIAZABAL RUBIAL,
Estrella DURÁ FERRANDIS,
Ibán GARCÍA DEL BLANCO,
Isabel GARCÍA MUÑOZ,
Javi LÓPEZ,
Javier MORENO SÁNCHEZ,
Jonás FERNÁNDEZ,
Juan Fernando LÓPEZ AGUILAR,
Marcos ROS SEMPERE,
Nacho SÁNCHEZ AMOR
|
3
|
4
|
1
|
5
|
5
|
Romania S&DAbstain (6) |
Germany S&DFor (1) |
Italy S&DFor (1) |
Poland S&DFor (1) |
||||
| ID |
55
|
1
|
1
|
2
|
1
|
2
|
2
|
1
|
Germany IDAgainst (7)Abstain (1) |
Italy IDAgainst (22)
Alessandra BASSO,
Alessandro PANZA,
Anna BONFRISCO,
Annalisa TARDINO,
Antonio Maria RINALDI,
Danilo Oscar LANCINI,
Elena LIZZI,
Gianantonio DA RE,
Gianna GANCIA,
Isabella TOVAGLIERI,
Mara BIZZOTTO,
Marco CAMPOMENOSI,
Marco ZANNI,
Massimo CASANOVA,
Matteo ADINOLFI,
Paolo BORCHIA,
Rosanna CONTE,
Silvia SARDONE,
Simona BALDASSARRE,
Stefania ZAMBELLI,
Susanna CECCARDI,
Valentino GRANT
|
|||||||||||||||||||
| ECR |
57
|
1
|
2
|
1
|
1
|
2
|
3
|
2
|
4
|
4
|
3
|
1
|
Italy ECRAgainst (6) |
Poland ECRAgainst (27)
Adam BIELAN,
Andżelika Anna MOŻDŻANOWSKA,
Anna FOTYGA,
Anna ZALEWSKA,
Beata KEMPA,
Beata MAZUREK,
Beata SZYDŁO,
Bogdan RZOŃCA,
Dominik TARCZYŃSKI,
Elżbieta KRUK,
Elżbieta RAFALSKA,
Grzegorz TOBISZOWSKI,
Izabela-Helena KLOC,
Jacek SARYUSZ-WOLSKI,
Jadwiga WIŚNIEWSKA,
Joachim Stanisław BRUDZIŃSKI,
Joanna KOPCIŃSKA,
Karol KARSKI,
Kosma ZŁOTOWSKI,
Krzysztof JURGIEL,
Patryk JAKI,
Ryszard Antoni LEGUTKO,
Ryszard CZARNECKI,
Tomasz Piotr PORĘBA,
Witold Jan WASZCZYKOWSKI,
Zbigniew KUŹMIUK,
Zdzisław KRASNODĘBSKI
|
|||||||||||||||
| Renew |
91
|
France RenewAgainst (17) |
1
|
1
|
1
|
3
|
Denmark RenewAgainst (4) |
2
|
1
|
1
|
2
|
1
|
3
|
4
|
3
|
1
|
8
|
2
|
2
|
Czechia RenewAgainst (5) |
Netherlands RenewAgainst (7) |
3
|
Romania RenewAgainst (8) |
Germany RenewAgainst (7) |
3
|
1
|
|||
 PPE |
145
|
France PPEAgainst (8) |
Greece PPEAgainst (5) |
Portugal PPEAgainst (6) |
2
|
4
|
1
|
1
|
2
|
2
|
4
|
5
|
Austria PPEAgainst (5) |
1
|
4
|
4
|
4
|
Bulgaria PPEAgainst (6) |
1
|
3
|
Netherlands PPEAgainst (6) |
5
|
Romania PPEAgainst (10) |
Germany PPEAgainst (24)
Andreas SCHWAB,
Angelika NIEBLER,
Axel VOSS,
Christian DOLESCHAL,
Christian EHLER,
Christine SCHNEIDER,
David McALLISTER,
Dennis RADTKE,
Helmut GEUKING,
Hildegard BENTELE,
Jens GIESEKE,
Karolin BRAUNSBERGER-REINHOLD,
Lena DÜPONT,
Manfred WEBER,
Markus FERBER,
Markus PIEPER,
Michael GAHLER,
Monika HOHLMEIER,
Niclas HERBST,
Norbert LINS,
Peter JAHR,
Peter LIESE,
Rainer WIELAND,
Sven SIMON
|
Italy PPEAgainst (10) |
A9-0140/2022 - Aurore Lalucq - Article 3, § 1, point 12 - Am 56 #
2022/05/19 Outcome: -: 318, +: 171, 0: 110
A9-0140/2022 - Aurore Lalucq - Article 16 - Am 57S #
2022/05/19 Outcome: -: 356, 0: 126, +: 117
A9-0140/2022 - Aurore Lalucq - Article 27 - Am 50S #
2022/05/19 Outcome: -: 358, 0: 194, +: 47
A9-0140/2022 - Aurore Lalucq - Article 29 - Am 51S #
2022/05/19 Outcome: -: 345, 0: 201, +: 53
A9-0140/2022 - Aurore Lalucq - Article 46 - Am 52S #
2022/05/19 Outcome: -: 360, 0: 120, +: 116
A9-0140/2022 - Aurore Lalucq - Article 47 - Am 58S #
2022/05/19 Outcome: -: 346, 0: 131, +: 118
A9-0140/2022 - Aurore Lalucq - Considérant 3 - Am 53 #
2022/05/19 Outcome: -: 328, 0: 140, +: 130
A9-0140/2022 - Aurore Lalucq - Après le considérant 3 - Am 54 #
2022/05/19 Outcome: -: 325, 0: 162, +: 109
A9-0140/2022 - Aurore Lalucq - Après le considérant 9 - Am 46 #
2022/05/19 Outcome: -: 328, 0: 161, +: 106
A9-0140/2022 - Aurore Lalucq - Considérant 12 - Am 55 #
2022/05/19 Outcome: -: 323, +: 162, 0: 111
A9-0140/2022 - Aurore Lalucq - Proposition de la Commission #
2022/05/19 Outcome: +: 503, 0: 48, -: 46
| Amendments | Dossier |
| 215 |
2021/0433(CNS)
2022/03/30
ECON
215 amendments...
Amendment 100 #
Proposal for a directive Recital 23 (23) T
Amendment 101 #
Proposal for a directive Recital 23 a (new) (23 a) A review clause is introduced in this Directive to assess the application of the Directive in the EU after five years. This assessment should reflect progress in the global implementation of the OECD agreement/GloBE Model Rules, as well as analysing the harmonized application of the Directive in the EU Member States. It should focus on the use of exemptions and derogations and its impact on internal market coherence. A review could be used as an opportunity to integrate further modification of the GloBE Model rules into EU law if necessary.
Amendment 102 #
Proposal for a directive Recital 23 a (new) (23 a) A review clause is introduced in this Directive in order to assess and reconsider certain exemptions and derogations, in particular regarding distribution tax systems and substance- based income exclusion, the relevance of the threshold for MNE Group and large- scale domestic firms in scope and the impact on tax revenues on developing countries. A review clause would be an opportunity to integrate further modification of the GloBE Model rules into EU law if necessary.
Amendment 103 #
Proposal for a directive Recital 24 a (new) (24 a) The Pillar 2, besides the national domestic laws introduced by the current directive, consists of the treaty-based rule Subject to Tax Rule (STTR), that allows source jurisdictions to impose limited source taxation on certain related party payments that are subject to tax below a minimum rate. The European Commission should recommend Member- States to change their bilateral tax agreements with low-income countries in order to dully include it.
Amendment 104 #
Proposal for a directive Recital 24 a (new) (24 a) The proposal lacks a comprehensive impact assessment that shall be carried out before this directive enters into force; Impact assessment needs to take into account a scenario that USA and other major trading partners do not implement OECD Model Rules or implement them with a significant delay.
Amendment 105 #
Proposal for a directive Recital 24 b (new) (24 b) The growing importance of intangible assets in value creation highlights further flaws in the new international CIT rules.
Amendment 106 #
Proposal for a directive Recital 24 c (new) (24 c) It is of the utmost importance that the final version of the OECD Model Rules is transposed into this directive without any unnecessary additions which could render the Member States and EU companies not competitive with the rest of the world.
Amendment 107 #
Proposal for a directive Recital 24 d (new) (24 d) The directive shall be interpreted in line with the OECD Commentary to the GloBE Model Rules, provided that these are in compliance with EU law.
Amendment 108 #
Proposal for a directive Article 2 – paragraph 1 1. This Directive shall apply to constituent entities located in the Union that are members of an MNE group or a large-scale domestic group which has an annual revenue of EUR 750 000 000 or more in its consolidated financial statement
Amendment 109 #
Proposal for a directive Article 2 – paragraph 1 1. This Directive shall apply to constituent entities located in the Union that are members of an MNE group
Amendment 110 #
Proposal for a directive Article 2 – paragraph 1 1. This Directive shall apply to constituent entities located in the Union that are members of an MNE group or a large-scale domestic group which has an annual revenue of EUR
Amendment 111 #
Proposal for a directive Article 2 – paragraph 1 1. This Directive shall apply to constituent entities located in the Union that are members of an MNE group or a large-scale domestic group which has an annual revenue of EUR 750 000 000 or more in its consolidated financial statements in at least two of the last four consecutive fiscal years. Each Member State may apply an income inclusion rule in accordance with this Directive also to MNE groups which have annual revenues above a nationally defined lower threshold if the ultimate parent entity is tax resident in this Member State. The same threshold shall then apply to large- scale domestic groups of this Member State.
Amendment 112 #
Proposal for a directive Article 2 – paragraph 2 2. Where
Amendment 113 #
Proposal for a directive Article 2 – paragraph 3 – point a (a) a governmental entity, an international organisation, a non-profit organisation, a pension fund
Amendment 114 #
Proposal for a directive Article 2 – paragraph 3 – point a (a) a governmental entity, an international organisation
Amendment 115 #
Proposal for a directive Article 2 – paragraph 3 – point b Amendment 116 #
Proposal for a directive Article 2 – paragraph 3 – point c Amendment 117 #
Proposal for a directive Article 3 – paragraph 1 – point 12 (12) ‘minimum tax rate’ means
Amendment 118 #
Proposal for a directive Article 3 – paragraph 1 – point 12 (12) ‘minimum tax rate’ means at least fifteen percent (15 %);
Amendment 119 #
Proposal for a directive Article 3 – paragraph 1 – point 12 (12) ‘minimum tax rate’ means fifteen percent (15 %) as defined in the OECD agreement;
Amendment 120 #
Proposal for a directive Article 3 – paragraph 1 – point 12 (12) ‘minimum tax rate’ means fifteen percent (15 % hereinafter);
Amendment 121 #
Proposal for a directive Article 3 – paragraph 1 – point 18 – introductory part (18) ‘controlling interest’ means an
Amendment 122 #
Proposal for a directive Article 3 – paragraph 1 – point 20 (20) ‘ownership interest’ means any equity interest that carries rights to the profits, capital or reserves of an
Amendment 123 #
Proposal for a directive Article 3 – paragraph 1 – point 23 – point a (a) provides for the determination of the excess profits of the constituent entities located in that jurisdiction
Amendment 124 #
Proposal for a directive Article 3 – paragraph 1 – point 23 – point b Amendment 125 #
Proposal for a directive Article 3 – paragraph 1 – point 25 – point a (a) it is designed to pool assets which may be financial
Amendment 126 #
Proposal for a directive Article 3 – paragraph 1 – point 25 – point e (e) its investors have a right to return from the assets of the fund or income earned on those assets, based on the contribution
Amendment 127 #
Proposal for a directive Article 3 – paragraph 1 – point 32 Amendment 128 #
Proposal for a directive Article 3 – paragraph 1 – point 32 – point a (a) a refundable tax credit designed in
Amendment 129 #
Proposal for a directive Article 3 – paragraph 1 – point 32 – point a (a) a refundable tax credit designed in such a way that it is payable as a cash payment or a cash equivalent to a constituent entity within
Amendment 130 #
Proposal for a directive Article 3 – paragraph 1 – point 32 – point a (a) a refundable tax credit designed in such a way that it is payable as a cash payment or a cash equivalent to a constituent entity within f
Amendment 131 #
Proposal for a directive Article 3 – paragraph 1 – point 32 – point b (b)
Amendment 132 #
Proposal for a directive Article 3 – paragraph 1 – point 32 – point b (b) if the tax credit is refundable in part, the portion of the refundable tax credit that is payable as a cash payment or a cash equivalent to a constituent entity within f
Amendment 133 #
Proposal for a directive Article 3 – paragraph 1 – point 38 a (new) (38 a) The Commission may adopt implementing acts in accordance with Article 52 in order to laydown definitions of more concepts, or to modify any of the above definitions other than the one for the ‘minimum tax rate’, especially in the light of future refinements or clarification of the GloBE Model Rules.
Amendment 134 #
Proposal for a directive Article 3 – paragraph 1 a (new) Amendment 135 #
Proposal for a directive Article 4 – paragraph 1 – introductory part 1. A constituent entity other than a flow-through entity shall be deemed to be located in the jurisdiction where it is considered as resident for tax purposes based on its place of effective management,
Amendment 136 #
Proposal for a directive Article 4 – paragraph 1 – introductory part 1. A constituent entity other than a flow-through entity shall be deemed to be located in the jurisdiction where it is considered as resident for tax purposes based on its place of management, its place of creation or similar criteria
Amendment 137 #
Proposal for a directive Article 4 a (new) Article 4 a Anti-avoidance rules 1. For the purposes of calculating the top- up tax to be levied under the rules of this Directive, a Member State shall disregard an arrangement or a series of arrangements which, having been put in place for the essential purpose of obtaining a tax advantage that defeats the object or purpose of this Directive, are not genuine, having regard to all relevant facts and circumstances. An arrangement may comprise more than one step or part. 2. For the purposes of paragraph 1, an arrangement or a series of arrangements shall be regarded as non-genuine where they are not put in place for valid commercial reasons that reflect economic reality. 3. Arrangements or a series of arrangements that are disregarded in accordance with paragraph 1 shall be treated, for the purpose of calculating the tax base, by reference to their economic substance. 4. The Commission shall be empowered to adopt delegated acts in accordance with Article 52 in order to lay down more detailed rules against tax avoidance, especially in the light of future refinements of the GloBE Model Rules.
Amendment 138 #
Proposal for a directive Article 4 a (new) Article 4 a Anti Avoidance Rules 1. For the purposes of calculating the top- up tax to be levied under the rules of this Directive, a Member State shall disregard an arrangement or a series of arrangements which, having been put in place for the essential purpose of obtaining a tax advantage that defeats the object or purpose of this Directive, are not genuine, having regard to all relevant facts and circumstances. An arrangement may comprise more than one step or part. 2. For the purposes of paragraph 1, an arrangement or a series thereof shall be regarded as non-genuine to the extent that they are not put in place for valid commercial reasons that reflect economic reality. 3. Arrangements or a series thereof that are disregarded in accordance with paragraph 1 shall be treated, for the purpose of calculating the tax base, by reference to their economic substance. 4. The Commission shall be empowered to adopt delegated acts in accordance with Article 52 in order to lay down more detailed rules against tax avoidance, especially in the light of future refinements of the GloBE Model Rules.
Amendment 139 #
Proposal for a directive Article 8 – paragraph 1 1.
Amendment 140 #
Proposal for a directive Article 8 – paragraph 2 2. A
Amendment 141 #
Proposal for a directive Article 10 – paragraph 2 Amendment 142 #
Proposal for a directive Article 10 – paragraph 3 Amendment 143 #
Proposal for a directive Article 10 – paragraph 3 3. Where the amount of qualified domestic top-up tax taken into consideration in the computation of the jurisdictional top-up tax in accordance with Article 26 for a fiscal year has not been fully paid within the
Amendment 144 #
Proposal for a directive Article 10 – paragraph 4 4. Member States that elect to apply a domestic top-up tax shall notify the Commission of this election within four months
Amendment 145 #
Proposal for a directive Article 13 – paragraph 6 – introductory part 6.
Amendment 146 #
Proposal for a directive Article 13 – paragraph 8 a (new) 8 a. The Commission may, by means of implementing acts, further specify the meaning of the terms used in paragraphs 5 and 6. The implementing acts referred to in the first subparagraph shall be adopted in accordance with the examination procedure referred to in Article 53a (1).
Amendment 147 #
Proposal for a directive Article 13 – paragraph 8 a (new) 8 a. The Commission may, by means of implementing acts, further specify the meaning of the terms used in paragraphs 5 and 6. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 52a ;
Amendment 148 #
Proposal for a directive Article 13 – paragraph 8 b (new) Amendment 149 #
Proposal for a directive Article 13 – paragraph 8 b (new) 8 b. The Commission may adopt delegated acts in accordance with Article 52 in order to modify the formula of paragraph5, so as to accommodate for a corresponding change of the GloBE Model Rules.
Amendment 150 #
Proposal for a directive Article 15 – paragraph 1 – point a – point i (i)
Amendment 151 #
Proposal for a directive Article 15 – paragraph 1 – point b – point i (i)
Amendment 152 #
Proposal for a directive Article 15 – paragraph 3 Amendment 153 #
Proposal for a directive Article 15 – paragraph 5 5.
Amendment 154 #
Proposal for a directive Article 15 – paragraph 11 a (new) 11 a. The Commission may adopt delegated acts in accordance with Article 52 in order to modify any of the definitions of paragraph 1, or to amend any of the items for which adjustments are provided for under paragraphs 2, 3, 6, 7, 10 and 11, especially in the light of future refinements of the GloBE Model Rules.
Amendment 155 #
Proposal for a directive Article 15 – paragraph 11 a (new) 11 a. The Commission may adopt delegated acts in accordance with Article 52 in order to modify any of the definitions of paragraph 1, or to amend any of the items for which adjustments are provided for under paragraphs 2, 3, 6, 7, 10 and 11, especially in the light of future refinements of the GloBE Model Rules.
Amendment 158 #
Proposal for a directive Article 19 – paragraph 1 – point a (a) taxes
Amendment 159 #
Proposal for a directive Article 19 – paragraph 1 – point c (c) taxes imposed in lieu of a generally applicable corporate income tax, understood as alternatives to corporate income tax such as alternative minimum taxes; and
Amendment 160 #
Proposal for a directive Article 19 – paragraph 1 – point d a (new) (d a) the top-up tax accrued by a constituent entity under a qualified domestic top-up tax.
Amendment 161 #
Proposal for a directive Article 19 – paragraph 2 – point b Amendment 162 #
Proposal for a directive Article 19 – paragraph 3 a (new) 3 a. The Commission may, by means of implementing acts, further specify the meaning of the terms used in paragraph 1. The implementing acts referred to in the first subparagraph shall be adopted in accordance with the examination procedure referred to in Article 53a (1).
Amendment 163 #
Proposal for a directive Article 19 – paragraph 3 a (new) 3 a. The Commission may, by means of implementing acts, further specify the meaning of the terms used in paragraph 1. The implementing acts referred to in the first subparagraph shall be adopted in accordance with the examination procedure referred to in Article 52a.
Amendment 164 #
Proposal for a directive Article 20 – paragraph 2 – point d Amendment 165 #
Proposal for a directive Article 20 – paragraph 3 – point b (b) the amount of credit or refund in respect of a refundable tax credit that
Amendment 166 #
Proposal for a directive Article 20 – paragraph 3 – point c (c) the amount of covered taxes refunded or credited to a constituent entity that was not treated as an adjustment to tax expense
Amendment 167 #
Proposal for a directive Article 21 – paragraph 7 – introductory part 7. A deferred tax liability that is not paid or reversed within the
Amendment 168 #
Proposal for a directive Article 21 – paragraph 7 – introductory part 7. A deferred tax liability that is not paid or reversed within the
Amendment 169 #
Proposal for a directive Article 21 – paragraph 7 – subparagraph 1 The amount of the recaptured deferred tax liability determined for the fiscal year shall be treated as a reduction to the covered tax of the
Amendment 170 #
Proposal for a directive Article 21 – paragraph 8 – point c Amendment 171 #
Proposal for a directive Article 21 – paragraph 8 – point c Amendment 172 #
Proposal for a directive Article 21 – paragraph 8 – point c (c) expenses for research and development
Amendment 173 #
Proposal for a directive Article 21 – paragraph 8 – point e Amendment 174 #
Proposal for a directive Article 21 – paragraph 8 a (new) 8 a. The Commission is empowered to adopt delegated acts in accordance with Article 52 to amend any of the items to which an exception accrual applies under paragraph 8, especially in the light of future refinements of the GloBE Model Rules.
Amendment 175 #
Proposal for a directive Article 24 – paragraph 1 – subparagraph 2 At the election of the filing constituent entity, a decrease in covered taxes which is immaterial may be treated as an adjustment to covered taxes in the fiscal year in which the adjustment is made. An immaterial decrease in covered taxes shall be a decrease of less than EUR
Amendment 176 #
Proposal for a directive Article 25 – paragraph 2 – subparagraph 2 – point a (a) the qualifying income of the constituent entities is the sum of the qualifying income of all constituent entities located in the jurisdiction determined in accordance with Chapter III, taking into account
Amendment 177 #
Proposal for a directive Article 25 – paragraph 2 – subparagraph 2 – point a (a) the qualifying income of the
Amendment 178 #
Proposal for a directive Article 26 – paragraph 3 – introductory part 3. The jurisdictional top-up tax for a fiscal year shall be computed in accordance with the following formula: Jurisdictional top – up tax = (top up tax percentage x excess profit) + additional top – up tax
Amendment 179 #
Proposal for a directive Article 26 – paragraph 3 – subparagraph 2 – point b Amendment 181 #
Proposal for a directive Article 27 – paragraph 1 – point a (a) ‘eligible employees’ means full- time or part-time employees of a constituent entity
Amendment 182 #
Proposal for a directive Article 27 – paragraph 2 2. Unless a non-European filing entity of an MNE group elects not to apply the substance-
Amendment 183 #
Proposal for a directive Article 27 – paragraph 2 a (new) 2 a. The substance-based income exclusion does not apply for constituent entites in the European Union.
Amendment 184 #
Proposal for a directive Article 27 – paragraph 3 – introductory part 3. The payroll carve-out of a constituent entity located in a jurisdiction shall be equal to
Amendment 185 #
Proposal for a directive Article 27 – paragraph 3 – introductory part 3. The payroll carve-out of a constituent entity located in a jurisdiction outside of the European Union shall be equal to 5 % of its eligible payroll costs of eligible employees who perform activities for the MNE group in such jurisdiction, with the exception of eligible payroll costs that are:
Amendment 186 #
Proposal for a directive Article 27 – paragraph 3 – point a (a) capitalised and included in the eligible tangible asset carve-out base;
Amendment 187 #
Proposal for a directive Article 27 – paragraph 3 – point b Amendment 188 #
Proposal for a directive Article 27 – paragraph 4 – point b Amendment 189 #
Proposal for a directive Article 27 – paragraph 9 a (new) 9 a. The Commission may, by means of implementing acts, further specify the meaning of the terms used in paragraph 1. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 52a.
Amendment 190 #
Proposal for a directive Article 29 Amendment 191 #
Proposal for a directive Article 29 – paragraph 1 – introductory part 1. By way of derogation from Articles 25 to 28, at the election of the filing constituent entity, the top-up tax due for the constituent entities located in a jurisdiction outside of the European Union shall be equal to zero for a fiscal year if, for such fiscal year:
Amendment 192 #
Proposal for a directive Article 29 – paragraph 1 a (new) 1 a. The thresholds in paragraph 1 of this article shall be adjusted on 31 December of every year in order reflect changes in the Harmonised Index of Consumer Prices.
Amendment 193 #
Proposal for a directive Article 31 – paragraph 4 – introductory part 4. Where a single MNE group demerges into two or more groups (each a “demerged group”), the consolidated revenue threshold shall be deemed to be met by each demerged group under all circumstances for at least six years following the demerger and if it reports:
Amendment 194 #
Proposal for a directive Article 35 – paragraph 1 – point c – introductory part (c)
Amendment 195 #
Proposal for a directive Article 38 – paragraph 5 5. The outstanding balance, if any, of the deemed distribution tax recapture
Amendment 196 #
Proposal for a directive Article 38 – paragraph 5 5. The outstanding balance, if any, of the deemed distribution tax recapture account at the end of the f
Amendment 197 #
Proposal for a directive Article 38 – paragraph 5 5. The outstanding balance, if any, of the deemed distribution tax recapture account at the end of the
Amendment 198 #
Proposal for a directive Article 41 – paragraph 1 1. At the election of the filing constituent entity, a constituent entity- owner of an investment entity or an insurance investment entity may apply a taxable distribution method with respect to its ownership interest in the investment entity, provided that the constituent entity- owner is not an investment entity and can be reasonably expected to be subject to tax on distributions from the investment entity at a tax rate that equals or exceeds the minimum tax rate.
Amendment 199 #
Proposal for a directive Article 42 – paragraph 7 a (new) Amendment 200 #
Proposal for a directive Article 42 – paragraph 7 a (new) 7 a. The Council, acting unanimously on a proposal from the Commission, shall adopt the measures necessary to implement the filing obligations under this Directive.
Amendment 201 #
Proposal for a directive Article 42 – paragraph 7 b (new) 7 b. The Commissions hall by means of a delegated act, and if necessary a legislative proposal, propose the measures necessary to implement the filing obligations under this Directive and ensure the necessary exchange of information.
Amendment 202 #
1. The election referred to in Articles 2(3),
Amendment 203 #
Proposal for a directive Article 44 – paragraph 1 1. Member States shall lay down rules on penalties applicable to breaches of national rules adopted pursuant to this Directive, and shall take all necessary measures to ensure that they are effectively applied. The penalties provided for shall be effective
Amendment 204 #
Proposal for a directive Article 44 – paragraph 2 Amendment 205 #
Proposal for a directive Article 44 – paragraph 2 2. A constituent entity that does not comply with the requirement to file a top- up tax information return pursuant to Article 42 for a tax year within the prescribed deadline or makes a false declaration shall be charged an administrative pecuniary penalty
Amendment 206 #
Proposal for a directive Article 44 – paragraph 2 2. A constituent entity that does not comply with the requirement to file a top- up tax information return pursuant to Article 42 for a tax year within the prescribed deadline or makes a false declaration shall be charged an administrative pecuniary penalty amounting to 2,5 % of its turnover in the relevant fiscal year. This penalty shall only apply after the constituent entity has not provided the top-up tax information return pursuant to Article 42, following any reminder issued, within a period of 6 months.
Amendment 207 #
Proposal for a directive Article 44 – paragraph 2 2. A constituent entity that does not comply with the requirement to file a top- up tax information return pursuant to Article 42 for a tax year within the prescribed deadline or makes a false declaration shall be charged an administrative pecuniary penalty amounting to
Amendment 208 #
Proposal for a directive Article 44 – paragraph 2 2. A constituent entity that does not comply with the requirement to file a top- up tax information return pursuant to Article 42 for a tax year within the prescribed deadline or makes a false declaration shall be charged an administrative pecuniary penalty amounting to
Amendment 209 #
Proposal for a directive Article 44 – paragraph 2 2. A constituent entity that does not comply with the requirement to file a top- up tax information return pursuant to Article 42 for a tax year within the prescribed deadline or makes a false declaration shall be charged an administrative pecuniary penalty amounting to 5 % of its turnover in the relevant fiscal year. This penalty shall only apply after the constituent entity has not provided the top-up tax information return pursuant to Article 42, following any reminder issued, within a period of 6
Amendment 210 #
Proposal for a directive Article 44 – paragraph 2 a (new) 2 a. For the first three years of application, the penalties laid down in paragraph 2 shall be suspended.
Amendment 211 #
Proposal for a directive Article 46 Amendment 212 #
Proposal for a directive Article 46 Amendment 213 #
Proposal for a directive Article 46 Amendment 214 #
Proposal for a directive Article 47 Amendment 215 #
Proposal for a directive Article 47 Amendment 216 #
Proposal for a directive Article 47 – paragraph 1 1. The top-up tax due by an ultimate parent entity located in a Member State in accordance with Article 5(2) shall be reduced to zero in the first
Amendment 217 #
Proposal for a directive Article 47 – paragraph 2 2. Where the ultimate parent entity of an MNE group is located in a third country jurisdiction, the top-up tax due by a constituent entity located in a Member State in accordance with Article 13(2) shall be reduced to zero in the first
Amendment 218 #
Proposal for a directive Article 47 – paragraph 3 – point a (a) it has constituent entities in no more than
Amendment 219 #
Proposal for a directive Article 47 – paragraph 3 – point b (b) the sum of the net book value of the tangible assets of all the constituent entities of the MNE group other than the constituent entities located in the reference jurisdiction does not exceed EUR 75
Amendment 220 #
Proposal for a directive Article 47 – paragraph 4 – introductory part 4. The period of
Amendment 221 #
Proposal for a directive Article 47 – paragraph 4 – subparagraph 1 For MNE groups that are within the scope of this Directive when it enters into force, the
Amendment 222 #
Proposal for a directive Article 47 – paragraph 4 – subparagraph 1 For MNE groups that are within the scope of this Directive when it enters into force, the five-year period referred to in paragraph 1 shall start on 1 January 202
Amendment 223 #
Proposal for a directive Article 47 – paragraph 4 – subparagraph 1 For MNE groups that are within the scope of this Directive when it enters into force, the five-year period referred to in paragraph 1 shall start on 1 January 202
Amendment 224 #
Proposal for a directive Article 47 – paragraph 4 – subparagraph 2 For MNE groups that are within the scope of this Directive when it enters into force, the
Amendment 225 #
Proposal for a directive Article 47 – paragraph 4 – subparagraph 2 For MNE groups that are within the scope of this Directive when it enters into force, the five-year period referred to in paragraph 2 shall start on 1 January 202
Amendment 226 #
Proposal for a directive Article 47 – paragraph 4 – subparagraph 2 For MNE groups that are within the scope of this Directive when it enters into force, the five-year period referred to in paragraph 2 shall start on 1 January 202
Amendment 227 #
Proposal for a directive Article 48 Amendment 228 #
Proposal for a directive Article 50 Amendment 229 #
Proposal for a directive Article 50 Amendment 230 #
Proposal for a directive Article 50 – paragraph 1 1. The top-up tax due by an ultimate parent entity located in a Member State in accordance with Article 49 shall be reduced to zero in the first
Amendment 231 #
Proposal for a directive Article 50 – paragraph 2 2. For large-scale domestic groups that are in scope of this Directive when it enters into force, the
Amendment 232 #
Proposal for a directive Article 50 – paragraph 2 2. For large-scale domestic groups that are in scope of this Directive when it
Amendment 233 #
Proposal for a directive Article 50 – paragraph 2 2. For large-scale domestic groups that are in scope of this Directive when it enters into force, the five-year period abovementioned shall start on 1 January 202
Amendment 234 #
Proposal for a directive Article 51 – paragraph 1 – point b (b) it establishes a minimum effective tax rate of at least 21
Amendment 235 #
Proposal for a directive Article 51 – paragraph 3 a (new) 3 a. Before 01.01.2027, and then every 4 years, the Commission shall present a report to the European Parliament and the Council on the application of this Directive. The report shall assess at least the following: (a) whether any adjustments are needed to the definitions set out in this Directive, to ensure that the GloBE Model Rules are implemented uniformly and consistently with G20 members; (b) the impact of this Directive on the competitiveness of European economy, particularly in comparison to those G20 members who do not implement GloBE Model Rules; (c) the effects of this Directive on national laws, regulations and administrative provisions governing penalties; (d) the application of the administrative penalties; (e) the appropriateness and impact of expanding the scope of this Directive to EU based companies; (f) the cooperation between national competent authorities and the cooperation with third countries national authorities; (g) the total volume of top-up tax collected by each and individual Member State; (h) the number and a character of disputes occurring in the EU and between the Member States and third countries in relation to this Directive; (i) the administrative and economic costs of this Directive for Member States as a percentage of their GDP; (j) types and trends of unforeseen and inappropriate behaviour occurring in relation to this Directive.
Amendment 236 #
Proposal for a directive Article 51 a (new) Article 51 a Global Implementation Review By 30 June 2023 the European Commission shall publish a report evaluating whether a sufficient number of third countries has faithfully implemented the OECD agreement. Depending on the outcome of this evaluation, the European Commission may propose amendments to this directive safeguarding the competitiveness of European businesses.
Amendment 237 #
Proposal for a directive Article 52 – paragraph 2 2. The power to adopt delegated acts referred to in Articles 51(3), 4a(4), 13(8b),15(11a), 21(8a), and 42(7b) shall be conferred on the Commission for an indeterminate period of time from the date of entry into force of this Directive.
Amendment 238 #
Proposal for a directive Article 52 – paragraph 5 5. A delegated act adopted pursuant to
Amendment 239 #
Proposal for a directive Article 52 a (new) Article 52 a Commitee Procedure 1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No182/2011. 2. Where reference is made to this paragraph, Article5 of Regulation (EU) No 182/2011 shall apply.
Amendment 240 #
Proposal for a directive Article 53 – paragraph 1 The European Parliament shall be informed of the adoption of delegated acts by the Commission, of any objection formulated to them, and of the revocation of a delegation of powers by the Council in a timely manner.
Amendment 241 #
Proposal for a directive Article 53 – paragraph 1 a (new) By... [five years after the entry into force of this Directive], the Commission shall review the application of this Directive and report to the Council on its operation. The report shall address whether there is a need to amend this Directive in light of changes and developments in the international tax context, in particular regarding the implementation of the GloBE Model Rules outside the Union and the development of other, unilateral approaches towards minimum effective taxation of MNE groups. It should also focus on use of exemptions and derogations and its impact on internal market coherence. The report shall assess the impact of the Directive on EU countries’ tax revenue, investment decisions of the companies, as well as competitiveness of the EU within the global economy. Where appropriate, the report shall be accompanied by a legislative proposal. Such an impact assessment can support the OECD’s Inclusive Framework analysis of Pillar 2 and, if appropriate, feed into a modification of the rules at the OECD level and, if agreed, in the OECD, changes to the EU Directive.
Amendment 242 #
Proposal for a directive Article 53 – paragraph 1 a (new) The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No182/2011. Where reference is made to this paragraph, Article 5 of Regulation (EU)No 182/2011 shall apply.
Amendment 243 #
Proposal for a directive Article 53 – paragraph 1 b (new) The Commission shall, three years after the entry into force of this Directive, review its application and report to the Council on the operation of this Directive. The report shall address whether there is a need to amend this Directive in light of changes and developments in the international tax context, in particular regarding the implementation of the GloBE Model Rules outside the EU and the development of other, unilateral approaches towards minimum effective taxation of MNE groups. The Commission shall submit further such reports to the Council every three years. Where appropriate, the report shall be accompanied by a legislative proposal. In that report the Commission shall undertake a thorough analysis in particular of the effectiveness and efficiency of this Directive, including whether the scope of the Directive should be extended to cover MNE groups and large-scale domestic groups with a lower annual revenue threshold than the one laid down in Article 2(1), whether the minimum tax rate of Article 3 item (12) should be increased above fifteen percent, or whether the substance-based income inclusion of Article 27 should be partially or completely abolished.
Amendment 244 #
Proposal for a directive Article 53 – paragraph 1 c (new) This Directive shall not affect the application of domestic or agreement- based provisions on controlled foreign company rules within the meaning of Article 7 of Council Directive (EU) 2016/1164, including the right of Member States under Article 3 of said Directive to adopt provisions aimed at safeguarding a higher level of protection for domestic corporate tax bases, especially where stricter controlled foreign company rules follow the recommendations of the 2015 Final Report on Action 3 of the OECD/G20 Base Erosion and Profit Shifting Project. This Directive shall not affect the application of domestic provisions on alternative forms of minimum taxation of domestic groups or companies.
Amendment 245 #
Proposal for a directive Article 53 – paragraph 1 d (new) No earlier than five years after the entry into force of this Directive, and after consulting the committee of Article 53 (1), a Member State may derogate from the provision on the annual revenue threshold of Article 2(1), on the minimum tax rate of Article 3 item (12), or on the substance-based income inclusion of Article 27, so as to apply a lower annual revenue threshold, to apply a higher minimum tax rate, or to partially or wholly abolish the substance-based income inclusion.
Amendment 246 #
Proposal for a directive Article 53 a (new) Amendment 247 #
Proposal for a directive Article 53 b (new) Article 53 b Delimitation clause 1. This Directive shall not affect the application of domestic or agreement- based provisions on controlled foreign company rules within the meaning of Article 7 of Council Directive (EU) 2016/1164, including the right of Member States under Article 3 of said Directive to adopt provisions aimed at safeguarding a higher level of protection for domestic corporate tax bases, especially where stricter controlled foreign company rules follow the recommendations of the 2015 Final Report on Action 3 of the OECD/G20 Base Erosion and Profit Shifting Project. 2. This Directive shall not affect the application of domestic provisions on alternative forms of minimum taxation of domestic groups or companies.
Amendment 248 #
Proposal for a directive Article 53 c (new) Article 53 c Derogations After the entry into force of this Directive a Member State may derogate from the provision on the annual revenue threshold of Article 2(1) or on the minimum tax rate of Article 3 item (12) so as to apply a lower annual revenue threshold or to apply a higher minimum tax rate.
Amendment 249 #
Proposal for a directive Article 54 a (new) Amendment 250 #
Proposal for a directive Article 54 b (new) Article 54 b Review 1. By [three years after the entry into force of this Directive], the Commission shall review the application of this Directive and report to the Council on its operation. The report shall address whether there is a need to amend this Directive in light of changes and developments in the international tax context, in particular regarding the implementation of the GloBE Model Rules outside the Union and the development of other, unilateral approaches towards minimum effective taxation of MNE groups. 2. The report shall assess the impact of the substance-based income exclusion provision, the implementation of the optional qualified domestic top-up tax and the treatment of distribution tax systems on the effectiveness of ensuring a minimum effective level of taxation. The report shall consider the impact of the Directive on the revenues of member states and low income countries and shall evaluate the impact of a threshold reduction for MNE Groups and large- scale domestic firms. Where appropriate, the report shall be accompanied by a legislative proposal.
Amendment 251 #
Proposal for a directive Article 55 – paragraph 1 Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 202
Amendment 252 #
Proposal for a directive Article 55 – paragraph 1 Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 202
Amendment 253 #
Proposal for a directive Article 55 – paragraph 1 Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 202
Amendment 254 #
Proposal for a directive Article 55 – paragraph 1 Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 202
Amendment 255 #
Proposal for a directive Article 55 – paragraph 3 They shall apply those provisions
Amendment 256 #
Proposal for a directive Article 55 – paragraph 3 They shall apply those provisions from 1 January 202
Amendment 257 #
Proposal for a directive Article 55 – paragraph 3 They shall apply those provisions from 1 January 202
Amendment 258 #
Proposal for a directive Article 55 – paragraph 3 They shall apply those provisions from 1 January 202
Amendment 259 #
Proposal for a directive Article 55 – paragraph 4 Amendment 260 #
Proposal for a directive Article 55 – paragraph 4 However, they shall apply the provisions necessary to comply with Articles 11, 12 and 13
Amendment 261 #
Proposal for a directive Article 55 – paragraph 4 However, they shall apply the provisions necessary to comply with Articles 11, 12 and 13 from 1 January 202
Amendment 262 #
Proposal for a directive Article 55 a (new) Article 55 a Review Clayse By … [five years after the entry into force of this Directive], the Commission shall report to the Council and the Parliament on its application by Member States. The report must perform a general evaluation of the implementation of the rules provisioned in this Directive and refer, concretely: a) an assessment on the impact of the directive on Member States tax revenue; b) an assessment on the impact of the rules on the European companies competitiveness, mainly on investment strategies, possible relocations, compliance costs, administrative burden and double taxation issues; c) an evaluation on the international tax context on corporate taxation matters, in particular regarding the implementation of the GloBE Model Rules by third jurisdictions, namely on the implementation of qualified income inclusion rules in accordance with article 51 criteria; d) an evaluation on the need to propose negotiations to change specific GloBE Moder Rules, having the EU Member States experience and the global context in regard.
Amendment 263 #
Proposal for a directive Annex I Amendment 49 #
Proposal for a directive Recital 2 (2) In a continued effort to put an end to tax practices of MNEs which allow them to shift profits to jurisdictions where they are subject to no or very low taxation, the OECD has further developed a set of international tax rules to ensure that MNEs pay a fair share of tax wherever they operate. This major reform aims to put a floor on competition over corporate income tax rates through the establishment of a global minimum level of taxation. By removing a substantial part of the advantages of shifting profits to jurisdictions with no or very low taxation, the global minimum tax reform will level the playing field for businesses worldwide and allow jurisdictions to better protect their tax bases. However, a wide scope for tax competition between Member States will remain. The minimum tax should not be regarded as an optimal level of corporate taxation and Member States should not use this opportunity to lower their corporate taxation levels, either through the nominal rate as increasing allowances.
Amendment 50 #
Proposal for a directive Recital 2 (2) In a continued effort to put an end
Amendment 51 #
Proposal for a directive Recital 2 (2) In a continued effort to put an end to tax practices of MNEs which allow them to shift profits to jurisdictions where they are subject to no or very low taxation, the OECD has further developed a set of international tax rules to ensure that MNEs pay a fair share of tax wherever they operate. This major reform aims to put a floor on competition over corporate income tax rates through the establishment of a global minimum level of taxation, and not eliminate tax competition overall. By removing a substantial part of the advantages of shifting profits to jurisdictions with no or very low taxation, the global minimum tax reform will level the playing field for businesses worldwide and allow jurisdictions to better protect
Amendment 52 #
Proposal for a directive Recital 3 (3) This political objective has been translated into the Global Anti-Base Erosion Model Rules (GloBE Model Rules) approved on 14 December 2021 by the OECD/G20 Inclusive Framework on BEPS to which Member States have committed. In the Council Conclusions of 7 December 20218 , the Council reiterated its firm support of the global minimum tax reform and committed to a swift implementation of the agreement by means of Union legislation. In this context, it is essential that Member States effectively implement their commitment to achieve a global minimum level of taxation. It is furthermore essential to avoid deviations on substantive matters from the OECD agreement, to confirm the EU support for the compromise negotiated under the OECD umbrella. _________________ 8 Council Conclusions 14767/21 of 7
Amendment 53 #
Proposal for a directive Recital 3 (3) This political objective has been translated into the Global Anti-Base Erosion Model Rules (GloBE Model Rules) approved on 14 December 2021 by the OECD/G20 Inclusive Framework on BEPS to which Member States have committed. In the Council Conclusions of 7 December 20218 , the Council reiterated its firm support of the global minimum tax reform and committed to a swift implementation of the agreement by means of Union legislation. In this context, it is essential that Member States effectively implement their commitment to achieve a global minimum level of taxation, in order to ensure a fair tax competition in the international framework. _________________ 8 Council Conclusions 14767/21 of 7
Amendment 54 #
Proposal for a directive Recital 3 (3) This political objective has been translated into the Global Anti-Base Erosion Model Rules (GloBE Model Rules) approved on 14 December 2021 by the OECD/G20 Inclusive Framework on BEPS to which Member States have committed. In the Council Conclusions of 7 December 2021
Amendment 55 #
Proposal for a directive Recital 3 a (new) (3 a) It is neither possible, nor indeed desirable, to enforce uniformity in the interpretation and application of the GloBE worldwide. Divergences are inevitable, and can and should be tolerated, as long as they do not detract from the effectiveness of the GloBE in achieving its intended outcomes. This applies in particular to the agreed minimum rate of15%. The average global statutory corporate tax rate is now 25%, and it remains higher in regions such as Africa and South America. The global average has declined steadily from a rate of 46% in 1980. The proposed minimum ETR of 15%,even if effectively implemented, will continue to provide a strong incentive for businesses to shift profits. The 15% rate now agreed should be regarded as the absolute floor, and not a ceiling. It is therefore that the Union is setting a higher rate.
Amendment 56 #
Proposal for a directive Recital 4 (4) In a Union of closely integrated economies, it is crucial that the global minimum tax reform is implemented in a sufficiently coherent and coordinated fashion. Considering the scale, detail and technicalities of those new international tax rules,
Amendment 57 #
Proposal for a directive Recital 4 (4) In a Union of closely integrated economies, it is crucial that the global minimum tax reform is implemented in a sufficiently coherent and coordinated fashion. Considering the scale, detail and technicalities of those new international tax rules, only a common Union framework would prevent a fragmentation of the internal market in the implementation of
Amendment 58 #
Proposal for a directive Recital 5 (5) It is necessary to lay down rules in order to establish an efficient and coherent framework for the global minimum level of taxation at Union level. The framework creates a system of two interlocked rules, together referred to as the GloBE rules, through which an additional amount of tax called a top-up tax should be collected each time that the effective tax rate (ETR) of an MNE in a given jurisdiction is below
Amendment 59 #
Proposal for a directive Recital 5 (5) It is necessary to lay down rules in order to establish an efficient and coherent framework for the global minimum level of taxation at Union level. The framework creates a system of two interlocked rules, together referred to as the GloBE rules, through which an additional amount of tax called a top-up tax should be collected each time that the effective tax rate (ETR) of an MNE in a given jurisdiction is below
Amendment 60 #
Proposal for a directive Recital 5 (5) It is necessary to lay down rules in order to establish an efficient and coherent framework for the global minimum level of taxation at Union level. The framework creates a system of two interlocked rules, together referred to as the GloBE rules, through which an additional amount of tax called a top-up tax should be collected each time that the effective tax rate (ETR) of an MNE in a given jurisdiction is below the 15 %. In such case, the jurisdiction is considered to be low-taxed. Those two rules are called the Income Inclusion Rule (IIR) and the Undertaxed Payment Rule (UTPR). Under this system, the parent entity of an MNE located in a Member State has the obligation to apply the IIR to its share of top-up tax relating to any entity of the group that is low-taxed, whether this is located within or outside the Union. The UTPR should act as a backstop to the IIR through a reallocation of any residual amount of top-up tax in cases where not the entire amount of top-up tax relating to low-taxed entities could be collected by parent entities through the application of the IIR. In order to honour the OECD agreement, the European Union should transpose it faithfully and should not attempt to materially go beyond it.
Amendment 61 #
Proposal for a directive Recital 5 (5) It is necessary to lay down rules in order to establish an efficient and coherent framework for the global minimum level of taxation at Union level, with full respect to the OECD agreement. The framework creates a system of two interlocked rules, together referred to as the GloBE rules, through which an additional amount of tax called a top-up tax should be collected each time that the effective tax rate (ETR) of an MNE in a given jurisdiction is below the 15 %. In such case, the jurisdiction is considered to be low-taxed. Those two rules are called the Income Inclusion Rule (IIR) and the Undertaxed Payment Rule (UTPR). Under this system, the parent entity of an MNE located in a Member State has the obligation to apply the IIR to its share of top-up tax relating to any entity of the group that is low-taxed, whether this is located within or outside the Union. The UTPR should act as a backstop to the IIR through a reallocation of any residual amount of top-up tax in cases where not the entire amount of top-up tax relating to low-taxed entities could be collected by parent entities through the application of the IIR.
Amendment 62 #
Proposal for a directive Recital 6 (6) It is necessary to implement the GloBE Model Rules agreed by the Member States in a way that it remains as close as possible to the global agreement. This Directive closely follows the content and structure of the GloBE Model Rules. To ensure compatibility with primary Union
Amendment 63 #
Proposal for a directive Recital 6 (6) It is necessary to implement the GloBE Model Rules agreed by the Member States in a way that it remains
Amendment 64 #
Proposal for a directive Recital 6 (6) It is necessary to implement the GloBE Model Rules agreed by the Member States in a way that it remains as close as possible to the global agreement. The success of the agreement will depend entirely on a transparent and consistent implementation within the Union and globally. This Directive closely follows the content and structure of the GloBE Model Rules. To ensure compatibility with primary Union law, and more precisely with the freedom of establishment, the rules of this Directive should apply to entities resident in a Member State as well as non-resident entities of a parent entity located in that Member State. This Directive should also apply to very large- scale, purely domestic groups. In this way, the legal framework would be designed to avoid any risk of discrimination between cross-border and domestic situations. All entities, including the parent entity that applies the IIR, which are located in a Member State that is low-
Amendment 65 #
Proposal for a directive Recital 7 (7) While it is necessary to ensure that tax avoidance practices are discouraged, adverse impacts on smaller MNEs in the internal market should be avoided. For this purpose, this Directive should only apply to entities located in the Union that are members of MNE groups or large-scale domestic groups that meet the annual threshold of at least EUR
Amendment 66 #
Proposal for a directive Recital 7 (7)
Amendment 67 #
Proposal for a directive Recital 7 (7) While it is necessary to ensure that tax avoidance practices are discouraged, adverse impacts on smaller MNEs in the internal market should be avoided. For this purpose, this Directive should only apply to entities located in the Union that are members of MNE groups or large-scale domestic groups that meet the annual threshold of at least EUR 750 000 000 of consolidated revenue. This threshold would be consistent with the threshold of existing international tax rules such as the country- by-country reporting rules9 . The European Commission should monitor if and how Member States are applying the GloBE Model Rules to smaller entities, and take appropriate measures, should the implementation be in conflict with the principles of the EU law or where it undermines internal market coherence. Entities within the scope of this Directive are referred to as constituent entities. Certain entities should be excluded from the scope based on their particular purpose and status. Excluded entities would be those that are not profit-driven and perform activities in the general interest and which are, for these reasons, not likely to be subject to tax in the Member State in which they are located. In order to protect those specific interests, it is necessary to exclude from
Amendment 68 #
Proposal for a directive Recital 7 (7) While it is necessary to ensure that tax avoidance practices are discouraged, adverse impacts on smaller MNEs in the internal market should be avoided. For this purpose, this Directive should only apply to entities located in the Union that are members of MNE groups or large-scale domestic groups that meet the annual threshold of at least EUR 750 000 000 of consolidated revenue. This threshold would be consistent with the threshold of existing international tax rules such as the country-
Amendment 69 #
Proposal for a directive Recital 7 (7) While it is necessary to ensure that tax avoidance practices are discouraged, adverse impacts on smaller MNEs in the
Amendment 70 #
(12) The ETR of an MNE group in each jurisdiction where it carries out activities or of a large-scale domestic group should be compared to the
Amendment 71 #
Proposal for a directive Recital 12 (12) The ETR of an MNE group in each jurisdiction where it carries out activities or
Amendment 72 #
Proposal for a directive Recital 12 (12) The ETR of an MNE group in each jurisdiction where it carries out activities or of a large-scale domestic group should be compared to the agreed minimum tax rate of
Amendment 73 #
Proposal for a directive Recital 12 (12) The ETR of an MNE group in each jurisdiction where it carries out activities or of a large-scale domestic group should be compared to the agreed minimum tax rate of
Amendment 74 #
Proposal for a directive Recital 12 (12) The ETR of an MNE group in each jurisdiction where it carries out activities or of a large-scale domestic group should be compared to the agreed minimum tax rate of 15 % in order to determine whether the MNE group or large-scale domestic group is liable to pay a top-up tax and consequently should apply the IIR or the UTPR. The minimum tax rate of 15 % agreed by the OECD/G20 Inclusive Framework on BEPS reflects a balanced compromise amongst corporate tax rates worldwide. In cases where the ETR of an MNE group falls below the minimum tax rate in a given jurisdiction, the top-up tax should be allocated to the entities in the MNE group that are liable to pay the tax in accordance with the application of the IIR and the UTPR, in order to comply with the globally agreed minimum effective rate of 15 %. In cases where the ETR of a large- scale domestic group falls below the minimum tax rate, the UPE at the top of the large-scale domestic group should apply the IIR in respect of its low-taxed
Amendment 75 #
Proposal for a directive Recital 13 (13) In order to allow Member States to benefit from the top-up tax revenues collected on their low-taxed constituent entities located in their territory, Member States
Amendment 76 #
Proposal for a directive Recital 13 (13) In order to allow Member States to
Amendment 77 #
Proposal for a directive Recital 14 Amendment 78 #
Proposal for a directive Recital 14 (14) T
Amendment 79 #
Proposal for a directive Recital 14 (14) To ensure a proportionate approach, this exercise should take into consideration certain specific situations in which BEPS risks are reduced. Therefore, the Directive should include a substance carve-out based
Amendment 80 #
Proposal for a directive Recital 14 (14) To ensure a proportionate approach, this exercise should take into consideration certain specific situations in which BEPS risks are reduced. Therefore, the Directive should include a substance carve-out based on the costs associated with employees and the value of tangible assets in a given jurisdiction. This would allow to address, to a certain extent, situations where an MNE group or a large-scale domestic
Amendment 81 #
Proposal for a directive Recital 15 Amendment 82 #
Proposal for a directive Recital 15 Amendment 83 #
Proposal for a directive Recital 16 Amendment 84 #
Proposal for a directive Recital 16 (16)
Amendment 85 #
Proposal for a directive Recital 17 Amendment 86 #
Proposal for a directive Recital 17 Amendment 87 #
Proposal for a directive Recital 17 a (new) (17 a) The significant changes on tax systems within the EU require the provision of a review clause that guarantees that the application of this Directive is subject to a proper evaluation after five years of enforcement.
Amendment 88 #
Proposal for a directive Recital 18 (18) For an efficient application of the system, it is crucial that procedures are coordinated at a group level. It will be necessary to operate a system ensuring the unobstructed flow of information within the MNE group and towards tax administrations where constituent entities are located. The primary responsibility of filing the information return should lie on the constituent entity itself. A waiver of such responsibility should however apply where the MNE group has designated another entity to file and share the information return. It could be either a local entity or an entity from another jurisdiction that has a competent authority agreement in place with the Member State of the constituent entity. In the first twelve- months after its entry into force, the Commission should review this Directive, via relevant delegated acts, in line with the agreement reached by the Inclusive Framework on filing requirements under the GloBE implementation framework. Considering the compliance adjustments that this system requires, groups that fall within the scope of this Directive for the first time should be granted a period of 18 months to comply with the information requirements.
Amendment 89 #
Proposal for a directive Recital 18 (18) For an efficient application of the system, it is crucial that procedures are coordinated at a group level. It will be necessary to operate a system ensuring the unobstructed flow of information within the MNE group and towards tax administrations where constituent entities are located. The primary responsibility of filing the information return should lie on the constituent entity itself. A waiver of such responsibility should however apply where the MNE group has designated another entity to file and share the information return. It could be either a local entity or an entity from another jurisdiction that has a competent authority agreement in place with the Member State of the constituent entity. In the first twelve- months after its entry into force, the Commission should review this Directive, via relevant delegated acts, in line with the agreement reached by the Inclusive Framework on filing requirements under the GloBE implementation framework. Considering the compliance adjustments that this system requires, groups that fall within the scope of this Directive for the first time should be granted a period of 18 months to comply with the information requirements.
Amendment 90 #
(19) Considering the benefits of transparency in the field of tax, it is encouraging that a significant amount of information will be filed with the tax authorities in all the participating jurisdictions. MNE groups within the scope of this Directive should be obliged to provide comprehensive and detailed information on their profits and effective tax rate in every jurisdiction where they have constituent entities. Such extensive reporting could be expected to increase transparency. More transparency in financial disclosure results in benefits for tax administration and more tax certainty for taxpayers. In that context, Council Directive 2011/16/EU2a will play a role in facilitating the implementation of this Directive and the future revision of Directive 2011/16/EU will be subject to an impact assessment to be carried out before 31 December 2022. _________________ 2a Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p.1).
Amendment 91 #
Proposal for a directive Recital 19 a (new) (19 a) The monitoring of potentially harmful and distortive measures that aim to compensate for the potential increase in corporate income tax should be ensured via an update of the state aid rules.
Amendment 92 #
Proposal for a directive Recital 19 b (new) (19 b) The Code of Conduct Group should continuously monitor the development of the accounting standards and their application for minimum tax purposes. If necessary, it shall make proposals to adjust the profit determination rules.
Amendment 93 #
Proposal for a directive Recital 20 (20) The effectiveness and fairness of the global minimum tax reform heavily relies on its
Amendment 94 #
Proposal for a directive Recital 20 (20) The effectiveness and fairness of the global minimum tax reform heavily relies on its
Amendment 95 #
Proposal for a directive Recital 20 (20) The effectiveness and fairness of the global minimum tax reform heavily relies on its worldwide implementation. It will thus be vital that all major trading partners of the Union apply either a qualified IIR or an equivalent set of rules on minimum taxation. In this context, and in support of legal certainty and efficiency of the global minimum tax rules, it is important to further delineate the conditions under which the rules implemented in a third country jurisdiction which will not transpose the rules of the global agreement can be granted
Amendment 96 #
Proposal for a directive Recital 20 (20) The effectiveness and fairness of the global minimum tax reform heavily relies on its worldwide implementation. It will thus be vital that all major trading partners of the Union apply either a qualified IIR or an equivalent set of rules on minimum taxation. In this context, and in support of legal certainty and efficiency of the global minimum tax rules, it is important to further delineate the conditions under which the rules implemented in a third country jurisdiction which will not transpose the minimum rules of the global agreement can be granted equivalence to a qualified IIR. To this end, this Directive should provide for an assessment, by the Commission, of the equivalence criteria based on certain parameters together with a listing of third country jurisdictions that meet the equivalence criteria. This list would be modified, through a delegated act, following any subsequent assessment of the legal framework implemented by a
Amendment 97 #
Proposal for a directive Recital 21 a (new) (21 a) The GloBE Model Rules are likely to be modified, , in particular the rules relating to safe harbours that aim to simplify filing requirements for constituent entities, for which this Directive should ensure the adequate safeguard for control. Therefore, 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 to ensure this Directive remains aligned with the international commitments of Member States.
Amendment 98 #
Proposal for a directive Recital 21 a (new) (21 a) The GloBE Model Rules are likely to be modified, in particular the rules relating to safe harbours that aim to simplify filing requirements for constituent entities, for which this Directive should ensure the adequate safeguard for control. Therefore, 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 to ensure this Directive remains aligned with the international commitments of Member States.
Amendment 99 #
Proposal for a directive Recital 22 (22) The rules for the application of the UTPR should apply as of 1 January 202
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History
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