Legal provisions of COM(2003)462 - Amendment of Directive 90/435/EEC on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States - Main contents
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| dossier | COM(2003)462 - Amendment of Directive 90/435/EEC on the common system of taxation applicable in the case of parent companies and ... |
|---|---|
| document | COM(2003)462  |
| date | December 22, 2003 |
Article 1
1. in Article 1(1) the following two indents shall be added:
"- to distributions of profits received by permanent establishments situated in that State of companies of other Member States which come from their subsidiaries of a Member State other than that where the permanent establishment is situated,
- to distributions of profits by companies of that State to permanent establishments situated in another Member State of companies of the same Member State of which they are subsidiaries."
2. in Article 2, the current paragraph shall be numbered '1.' and a new paragraph shall be added as follows:
"2. For the purposes of this Directive the term permanent establishment means a fixed place of business situated in a Member State through which the business of a company of another Member State is wholly or partly carried on in so far as the profits of that place of business are subject to tax in the Member State in which it is situated by virtue of the relevant bilateral tax treaty or, in the absence of such a treaty, by virtue of national law."
3. in Article 3, paragraph 1 shall be replaced by the following:
"For the purposes of applying this Directive:
(a) the status of parent company shall be attributed at least to any company of a Member State which fulfils the conditions set out in Article 2 and has a minimum holding of 20 % in the capital of a company of another Member State fulfilling the same conditions;
such status shall also be attributed, under the same conditions, to a company of a Member State which has a minimum holding of 20 % in the capital of a company of the same Member State, held in whole or in part by a permanent establishment of the former company situated in another Member State;
from 1 January 2007 the minimum holding percentage shall be 15 %;
from 1 January 2009 the minimum holding percentage shall be 10 %;
(b) subsidiary shall mean that company the capital of which includes the holding referred to in (a).";
4. Article 4 shall be amended as follows:
(a) Paragraph 1 shall be replaced by the following:
"1. Where a parent company or its permanent establishment, by virtue of the association of the parent company with its subsidiary, receives distributed profits, the State of the parent company and the State of its permanent establishment shall, except when the subsidiary is liquidated, either:
- refrain from taxing such profits, or
- tax such profits while authorising the parent company and the permanent establishment to deduct from the amount of tax due that fraction of the corporation tax related to those profits and paid by the subsidiary and any lower-tier subsidiary, subject to the condition that at each tier a company and its lower-tier subsidiary meet the requirements provided for in Articles 2 and 3, up to the limit of the amount of the corresponding tax due."
(b) The following paragraph 1a shall be inserted:
"1 a. Nothing in this Directive shall prevent the State of the parent company from considering a subsidiary to be fiscally transparent on the basis of that State's assessment of the legal characteristics of that subsidiary arising from the law under which it is constituted and therefore from taxing the parent company on its share of the profits of its subsidiary as and when those profits arise. In this case the State of the parent company shall refrain from taxing the distributed profits of the subsidiary.
When assessing the parent company's share of the profits of its subsidiary as they arise the State of the parent company shall either exempt those profits or authorise the parent company to deduct from the amount of tax due that fraction of the corporation tax related to the parent company's share of profits and paid by its subsidiary and any lower-tier subsidiary, subject to the condition that at each tier a company and its lower-tier subsidiary meet the requirements provided for in Articles 2 and 3, up to the limit of the amount of the corresponding tax due.";
(c) In paragraph 3, the first subparagraph shall be replaced by the following:"Paragraphs 1 and 1a shall apply until the date of effective entry into force of a common system of company taxation."
5. Article 5 shall be amended as follows:
(a) Paragraph 1 shall be replaced by the following:"Profits which a subsidiary distributes to its parent company shall be exempt from withholding tax."
(b) Paragraphs 2, 3 and 4 shall be deleted.;
6. the Annex shall be replaced by the text in the Annex to this Directive.
Article 2
When Member States adopt such measures, they shall contain a reference to this Directive or shall be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.
2. Member States shall communicate to the Commission the text of the provisions of national law which they adopt in the field covered by this Directive, together with a table showing how the provisions of this Directive correspond to the national provisions adopted.