Extracts from the press conference by Algirdas Šemeta, on a proposal to amend the Parent Subsidiary Directive (2011/96/EU) in order to close off opportunities for corporate tax avoidance

Type: Summary of press conference   Référence: I084042   Durée: 02:59  Lieu: Brussels - EC/Berlaymont
On 25 November 2013, Algirdas Šemeta, Member of the EC in charge of Taxation, Customs, Statistics, Audit and Anti-Fraud, gave a press conference to present the amendments to key EU corporate tax legislation, in order to significantly reduce tax avoidance in Europe. The proposal will close loopholes in the Parent-Subsidiary Directive, which some companies have been using to escape taxation. In particular, companies will no longer be able to exploit differences in the way intra-group payments are taxed across the EU to avoid paying any tax at all. The result will be that the Parent-Subsidiary Directive can continue to ensure a level-playing field for honest businesses in the Single Market without opening opportunities for aggressive tax planning. Today's proposal was foreseen in the Commission's Action Plan against tax evasion last year and will be an important contribution to the on-going battle against corporate tax avoidance at both EU and global level.

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00:00:00 Title 00:00:05
00:00:05 Exterior view of the Berlaymont building in Brussels 00:00:07
00:00:12 Arrival of Algirdas Šemeta, Member of the EC in charge of Taxation, Customs, Statistics, Audit and Anti-Fraud, at the press conference 00:00:08
00:00:20 Soundbite by Algirdas Šemeta (in ENGLISH): With today's proposal, the Commission is once again delivering on its promises from last year's Action Plan. The Parent-Subsidiary Directive's primary purpose is to ensure that companies from the same group are not taxed twice when they operate in different Member States. It is a business friendly law. However, mismatches between Member States tax systems have enabled some companies to exploit loopholes in this law, to minimise their tax bill or even escape taxation altogether. 00:00:38
00:00:58 Cutaway of the audience 00:00:04
00:01:02 Soundbite by Algirdas Šemeta (in ENGLISH): As I have said before, businesses are offered all the benefits of the Single Market, and we strive to reduce any obstacles to their cross border activities. But in return, these businesses need to make their fair contribution to public finances. We can no longer afford freeloaders who reap huge profits in the EU without contributing to the public purse. 00:00:29
00:01:30 Cutaway of a cameraman 00:00:04
00:01:34 Soundbite by Algirdas Šemeta (in ENGLISH): We are adapting our legislation to the market realities and shutting off opportunities for aggressive tax planning.While the amendments to the Parent-Subsidiary Directive may seem technical, they are very important. Essentially, they will close the door on a specific and well-known tax avoidance arrangement, known as hybrid loans. If a hybrid loan payment is tax deductible in the subsidiary's Member State, then it will have to be taxed by parent company's Member State. Double non-taxation ceases to be a risk. 00:00:41
00:02:14 Cutaway of the audience 00:00:04
00:02:18 Soundbite by Algirdas Šemeta (in ENGLISH): Moreover, Member States will have to implement a common anti-abuse rule, in line with our Recommendation on aggressive tax planning. This will allow them to ignore artificial tax planning and tax on the basis of real economic substance instead. With today's proposal, we will ensure that the spirit, as well as the letter, of our law is respected. The result should be fairer revenues for national budgets, fairer competition for businesses and fairer taxation across Europe. 00:00:37
00:02:55 Cutaway of the audience 00:00:04
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