EU 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(2013)814 - Amendment of Directive 2011/96/EU on the common system of taxation applicable in the case of parent companies and ...
document	COM(2013)814
date	July 8, 2014

table>(1)Council Directive 2011/96/EU (3) exempts dividends and other profit distributions paid by subsidiary companies to their parent companies from withholding taxes and eliminates double taxation of such income at the level of the parent company.

(2)	The benefits of Directive 2011/96/EU should not lead to situations of double non-taxation and, therefore, generate unintended tax benefits for groups of parent companies and subsidiaries of different Member States when compared to groups of companies of the same Member State.

(3)

For the purpose of avoiding situations of double non-taxation deriving from mismatches in the tax treatment of profit distributions between Member States, the Member State of the parent company and the Member State of its permanent establishment should not allow those companies to benefit from the tax exemption applied to received distributed profits, to the extent that such profits are deductible by the subsidiary of the parent company.

(4)	It is appropriate to update Part A of Annex I to Directive 2011/96/EU to include other forms of companies made subject to corporation tax in Poland and other forms of companies which have been introduced in the company law of Romania.

(5)	Directive 2011/96/EU should therefore be amended accordingly,