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Consultation on Taxation of cross border interest and royalty payments between associated companies

Title
Consultation on a recast and amended version of the Council Directive on a common system of taxation applicable to interest and royalty payments between associated companies of different Member States
Policy fields

Taxation

Target groups

All corporate taxpayers, tax practitioners, tax experts, academics, business and labour organisations and any other economic agents that may be affected by this initiative.

Period of consultation
From 26/7/2010 to 31/10/2010
Objective of the consultation

The Directive on a common system of taxation applicable to interest and royalty payments between associated companies of different Member States aims at solving double taxation problems linked to cross-border payments. In these cases, the State from which a payment is made (source State) charges a tax on its recipient company. Additionally, the recipient company is subject to tax on the income derived from this same payment in the Member State of its tax residence. The Directive provides for tax exemption in the source State. The exemption also applies when the payment is made from a permanent establishment (i.e., a branch) of the company place in a third Member State or received by such business centre.

The objective of this initiative is to clarify existing legislation while extending its benefits to a wider range of companies by: including other legal forms of companies enjoying the Directive; reducing the threshold to be considered associated company; taking account of indirect shareholdings to compute the total holding; alternatively, extending the exemption to payments between unrelated parties.  It will also be proposed to solve a potential technical problem derived from the requirement that the payment be a tax deductible cost for the permanent establishment making it by stating that the directive covers payments linked to the activity performed by such an establishment. 

How to submit your contribution

After you have completed the questionnaire online, you will be invited to press the "Submit" button.

The questionnaire will not be submitted until you press this button.

If you would prefer to complete the questionnaire manually, you can obtain it at the link below and, once completed, send it by letter, fax or electronic mail to the address, email or fax number indicated below.

View the consultation document
Consultation paperpdf(82 kB) Choose translations of the previous link 
Reference document

See: http://ec.europa.eu/taxation_customs/taxation/company_tax/interests_royalties/index_en.htm

Contact details
responsible service

DG TAXUD – Directorate D - Direct taxation, Tax Coordination,

Economic Analysis and Evaluation
e-mailTAXUD-D1-Consultation-Landr@ec.europa.eu
postal address

European Commission
Directorate-General for Taxation and Customs Union
Rue de Spa 3, Office 8/17
B-1049 Brussels
Fax: +32-2-29 56377

Number of responses received to this consultation
-
View the contributions
In the interests of transparency, organisations have been invited to provide the public with relevant information about themselves by registering in the Interest Representative Register and subscribing to its Code of Conduct. If the organisation is not registered, the submission is published separately from the registered organisations.
Results of consultation and next steps
Results
Protection of personal dataSpecific privacy statementpdf(18 kB) Choose translations of the previous link 

 

 

"How to submit your contribution" in respect of organisations

In the interests of transparency, organisations (including, for example, NGOs, trade associations and  commercial enterprises) are invited to provide the public with relevant information about themselves by registering in the Interest Representative Register and subscribing to its Code of Conduct

If you are a Registered organisation, please indicate the name and address of your organisation and your Register ID number on the first page of your contribution. Your contribution will then be considered as representing the views of your organisation.

Submit your contribution.

If your organisation is not registered, you have the opportunity to Register now.

Then return to this page to submit your contribution as a Registered organisation.

Responses from organisations not registered will be published separately.
Non-registered organisations, please submit your contributions here.

The Commission asks organisations who wish to submit comments in the context of public consultations to provide the Commission and the public at large with information about whom and what they represent. If an organisation decides not to provide this information, it is the Commission's stated policy to list the contribution as part of the individual contributions. (Consultation Standards, see COM (2002) 704, and Communication on ETI Follow-up, see COM (2007) 127 of 21/03/2007)