Legal provisions of COM(2016)683 - Common Consolidated Corporate Tax Base (CCCTB) - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
dossier | COM(2016)683 - Common Consolidated Corporate Tax Base (CCCTB). |
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document | COM(2016)683 |
date | October 25, 2016 |
CHAPTER I
SUBJECT MATTER, SCOPE AND DEFINITIONS
Contents
- Article 1 - Subject matter
- Article 2 - Scope
- Article 3 - Definitions
- Article 4 - Tax residence
- Article 5 - Parent company and qualifying subsidiaries
- Article 6 - Groups
- Article 7 - Effect of consolidation
- Article 8 - Timing
- Article 9 - Elimination of intra-group transactions
- Article 10 - Withholding taxes and other source taxation
- Article 11 - Fixed assets when joining the group
- Article 12 - Long-term contracts when joining the group
- Article 13 - Provisions, revenues and deductions when joining the group
- Article 14 - Timing for depreciation when joining or leaving a group
- Article 15 - Pre-entry losses
- Article 16 - Termination of a group
- Article 17 - Depreciation upon termination of a group
- Article 18 - Losses after the group terminates
- Article 19 - Fixed assets when leaving the group
- Article 20 - Self-generated intangible assets
- Article 21 - Losses on leaving the group
- Article 22 - Business reorganisations within a group
- Article 23 - Treatment of losses where a business reorganisation takes place between two or more groups
- Article 24 - Disallowance of exempt share disposals
- Article 25 - Tax credit relief
- Article 26 - Withholding tax
- Article 27 - Rules for determining transparency in the case of third country entities
- Article 28 - General rules
- Article 29 - Safeguard clause
- Article 30 - Joining and leaving the group
- Article 31 - Transparent entities
- Article 32 - Composition of the labour factor
- Article 33 - Allocation of employees and payroll
- Article 34 - Composition of the asset factor
- Article 35 - Allocation of assets
- Article 36 - Valuation
- Article 37 - Composition of the sales factor
- Article 38 - Sales by destination
- Article 39 - Detailed rules on the calculation of factors
- Article 40 - Calculation of the asset and sales factors for financial institutions
- Article 41 - Calculation of the asset and sales factors for insurance undertakings
- Article 42 - Oil and gas
- Article 43 - Shipping, inland waterways transport and air transport
- Article 44 - Items deductible from the apportioned share
- Article 45 - Tax liability
- Article 46 - Notice to create a group
- Article 47 - Term of a group
- Article 48 - Information in the notice to create a group
- Article 49 - Examination of the notice to create a group
- Article 50 - Tax year
- Article 51 - Tax returns and tax assessments
- Article 52 - Content of the consolidated tax return
- Article 53 - Notification of errors in the consolidated tax return
- Article 54 - Failure to file a tax return
- Article 55 - Electronic filing, tax returns and supporting documentation
- Article 56 - Amended tax assessments
- Article 57 - Central database
- Article 58 - Change of the principal taxpayer
- Article 59 - Record-keeping
- Article 60 - Provision of information to the competent authorities
- Article 61 - Request for an opinion from the competent authority
- Article 62 - Communication between competent authorities
- Article 63 - Secrecy clause
- Article 64 - Audits
- Article 65 - Disagreement between Member States
- Article 66 - Appeals
- Article 67 - Administrative appeals
- Article 68 - Judicial appeals
- Article 69 - Interest limitation rule
- Article 70 - Valuation
- Article 71 - Loss relief and recapture
- Article 72 - Switch-over
- Article 73 - Controlled foreign company legislation
- Article 74 - Hybrid mismatches
- Article 75 - Exercise of the delegation
- Article 76 - Informing the European Parliament
- Article 77 - Committee procedure
- Article 78 - Consultations on Article 29
- Article 79 - Review
- Article 80 - Transposition
- Article 81 - Entry into force
- Article 82 - Addressees
Article 1 - Subject matter
2. A company that applies the rules of this Directive shall cease to be subject to the national corporate tax law in respect of all matters regulated by this Directive, unless otherwise stated.
Article 2 - Scope
(a)it takes one of the company forms listed in Annex I;
(b)it is subject to one of the corporate taxes listed in Annex II or to a similar tax subsequently introduced;
(c)it belongs to a consolidated group for financial accounting purposes with a total consolidated group revenue that exceeded EUR 750 000 000 during the financial year preceding the relevant financial year;
(d)it qualifies as a parent company or qualifying subsidiary as referred to in Article 5 of this Directive and/or it has one or more permanent establishments as referred to in Article 5 of Directive 2016/xx/EU.
2. This Directive shall also apply to a company that is established under the laws of a third country in respect of its permanent establishments situated in one or more Member States where the company meets the conditions laid down in points (b) to (d) of paragraph 1.
As regards whether a company meets the condition of point (a) in paragraph 1, it shall suffice that the company in a third country has a similar form to one of the company forms in Annex I. For the purposes of point (a) of paragraph 1, the Commission shall adopt annually a list of third country company forms that are similar to the company forms listed in Annex I. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 77(2). The fact that a third country company form is not included in that list shall not preclude the application of this Directive to that form.
3. A company that meets the conditions of points (a), (b) and (d) of paragraph 1, but does not meet the conditions of point (c) of that paragraph, may opt, including for its permanent establishments situated in other Member States, to apply the rules of this Directive for a period of five tax years. That period shall automatically be extended for successive terms of five tax years, unless there is a notice of termination as referred to in the second subparagraph of Article 47. The conditions under points (a), (b) and (d) of paragraph 1 shall be met each time the extension takes place.
4. The rules of this Directive shall not apply to a shipping company under a special tax regime. A shipping company under a special tax regime shall be taken into account for the purpose of determining the companies which are members of the same group as referred to in Articles 5 and 6.
5. The Commission shall be empowered to adopt delegated acts in accordance with Article 75 to amend Annexes I and II to take account of changes to the laws of the Member States concerning company forms and corporate taxes.
Article 3 - Definitions
(1) taxpayer as defined in point (1) of Article 4 of Directive 2016/xx/EU;
(2) single taxpayer means a company that is not subject to the rules of this Directive but has opted to apply Directive 2016/xx/EU;
(3) non-taxpayer as defined in point (2) of Article 4 of Directive 2016/xx/EU;
(4) resident taxpayer as defined in point (3) of Article 4 of Directive 2016/xx/EU;
(5) non-resident taxpayer as defined in point (4) of Article 4 of Directive 2016/xx/EU;
(6) revenues as defined in point (5) of Article 4 of Directive 2016/xx/EU;
(7) expenses as defined in point (6) of Article 4 of Directive 2016/xx/EU;
(8) tax year as defined in point (7) of Article 4 of Directive 2016/xx/EU;
(9) profit as defined in point (8) of Article 4 of Directive 2016/xx/EU;
(10) loss as defined in point (9) of Article 4 of Directive 2016/xx/EU;
(11) principal taxpayer means one of the following:
(a)a resident taxpayer that forms a group with its qualifying subsidiaries, with one or more of its permanent establishments located in another Member State or Member States or with one or more permanent establishments of a qualifying subsidiary that is resident in a third country;
(b)a resident taxpayer designated by the group that is composed of only two or more resident taxpayers which are immediate qualifying subsidiaries of the same parent company resident in a third country;
(c)a resident taxpayer that is the qualifying subsidiary of a parent company resident in a third country, where that resident taxpayer forms a group with only one or more permanent establishments of its parent;
(d)a permanent establishment designated by a non-resident taxpayer that forms a group with only its permanent establishments located in two or more Member States;
(12) consolidated group for financial accounting purposes as defined in point (10) of Article 4 of Directive 2016/xx/EU;
(13) research and development as defined in point (11) of Article 4 of Directive 2016/xx/EU;
(14) borrowing costs as defined in point (12) of Article 4 of Directive 2016/xx/EU;
(15) exceeding borrowing costs as defined in point (13) of Article 4 of Directive 2016/xx/EU;
(16) value for tax purposes as defined in point (17) of Article 4 of Directive 2016/xx/EU;
(17) market value as defined in point (18) of Article 4 of Directive 2016/xx/EU;
(18) fixed assets as defined in point (19) of Article 4 of Directive 2016/xx/EU;
(19) financial assets as defined in point (20) of Article 4 of Directive 2016/xx/EU;
(20) economic owner as defined in point (28) of Article 4 of Directive 2016/xx/EU;
(21) financial undertaking as defined in point (29) of Article 4 of Directive 2016/xx/EU;
(22) group member means any taxpayer belonging to the same group, as referred to in Articles 5 and 6. Where a taxpayer maintains a taxable presence in one or more Member States other than that in which it is resident for tax purposes, each taxable presence shall be treated as a group member;
(23) consolidated tax base means the result of adding up the tax bases of all group members, as calculated in accordance with Directive 2016/xx/EU;
(24) intra-group transaction means any transaction between parties that are members of the same group at the time that the transaction is effected and that the associated revenues and expenses of that transaction fall to be recognised;
(25) apportioned share means the portion of the consolidated tax base of a group that is allocated to a group member in accordance with Chapter VIII;
(26) competent authority means the authority designated by each Member State to administer all matters related to the implementation of this Directive;
(27) principal tax authority means the competent authority of the Member State in which the principal taxpayer is resident for tax purposes or, where it concerns a permanent establishment of a non-resident taxpayer, the Member State in which that permanent establishment is situated;
(28) national corporate tax law as defined in point (32) of Article 4 of Directive 2016/xx/EU.
The Commission may adopt delegated acts in accordance with Article 75 in order to lay down definitions of more concepts.
CHAPTER II
RESIDENCY AND TERRITORIALITY RULES
Article 4 - Tax residence
2. A company that is resident in more than one Member State for tax purposes shall be considered to be resident in the Member State in which it has its place of effective management.
3. Where the place of effective management of a group member engaged in shipping or in inland waterways transport is aboard a ship or boat, the group member shall be considered to be resident for tax purposes in the Member State of the home harbour of the ship or boat, or, where there is no such home harbour, in the Member State of residence for tax purposes of the operator of the ship or boat.
4. A resident taxpayer shall be subject to corporate tax on all income derived from any source, whether inside or outside the Member State where it is resident for tax purposes.
5. A non-resident taxpayer shall be subject to corporate tax on all income from an activity carried on through a permanent establishment in a Member State.
CHAPTER III
CONSOLIDATION
Article 5 - Parent company and qualifying subsidiaries
(a)it has a right to exercise more than 50 % of the voting rights; and
(b)it has an ownership right amounting to more than 75 % of the subsidiary’s capital or it owns more than 75 % of the rights giving entitlement to profit.
2. For the purpose of calculating the thresholds referred to in paragraph 1 in relation to lower-tier subsidiaries, the following rules shall be applied:
(a)once the voting-right threshold is reached in respect of a subsidiary, the parent company shall be considered to hold 100 % of such rights;
(b)entitlement to profit and ownership of capital shall be calculated by multiplying the interests held, directly and indirectly, in subsidiaries at each tier. Ownership rights amounting to 75 % or less held directly or indirectly by the parent company, including rights in companies resident in a third country, shall also be taken into account in the calculation.
Article 6 - Groups
(a)all its permanent establishments that are situated in a Member State;
(b)all permanent establishments that are situated in a Member State and belong to its qualifying subsidiaries that are resident in a third country for tax purposes;
(c)all its qualifying subsidiaries that are resident in a Member State for tax purposes, including the permanent establishments of those subsidiaries where such permanent establishments are situated in a Member State;
(d)other resident taxpayers, including their permanent establishments that are situated in a Member State, where all those resident taxpayers are qualifying subsidiaries of a non-taxpayer who is resident in a third country for tax purposes, has a similar form to one of the company forms in Annex I and meets the condition of point (c) of Article 2(1).
2. A non-resident taxpayer shall form a group in respect of all of its permanent establishments that are situated in one or more Member States and with all of its qualifying subsidiaries that are resident in a Member State for tax purposes, including the permanent establishments of those subsidiaries where such permanent establishments are also situated in one or more Member States.
3. A company in insolvency or liquidation may not become a group member. A taxpayer in respect of which a declaration of insolvency is made or that is liquidated shall leave the group immediately.
Article 7 - Effect of consolidation
2. Where the consolidated tax base is negative, the loss shall be carried forward and be set off against the next positive consolidated tax base. Where the consolidated tax base is positive, it shall be apportioned in accordance with Chapter VIII.
Article 8 - Timing
2. A taxpayer shall become a member of a group on the date that the thresholds of Article 5 are reached. The thresholds must be met for at least nine consecutive months, failing which a taxpayer shall be treated as if it has never been a group member.
3. A taxpayer ceases to be a group member the day after it no longer meets the thresholds of Article 5.
Article 9 - Elimination of intra-group transactions
2. Groups shall apply a consistent and adequately documented method for recording intra-group transactions. Groups may change the method only for valid commercial reasons and only at the beginning of a tax year.
3. The method for recording intra-group transactions shall enable all intra-group transfers and sales to be identified at the lowest cost for assets not subject to depreciation or the value for tax purposes for depreciable assets.
4. Intra-group transfers shall not change the status of self-generated intangible assets.
Article 10 - Withholding taxes and other source taxation
CHAPTER IV
ENTERING AND LEAVING THE GROUP
Article 11 - Fixed assets when joining the group
2. The adjustment referred to in paragraph 1 shall also be made in respect of financial assets, with the exception of own shares and of participations that give rise to tax exempt income.
3. The adjustment referred to in paragraph 1 shall not be made where the taxpayer joining the group came from another group that was subject to the rules of this Directive.
4. The taxpayer that, as a result of a business reorganisation, no longer exists or no longer has a permanent establishment in the Member State in which it was resident for tax purposes on the date that it joined the group, shall be considered to have a permanent establishment in that Member State for the purpose of applying this Article.
Article 12 - Long-term contracts when joining the group
2. Revenues which have been taxed under national corporate tax law before the rules of this Directive became applicable to the taxpayer at an amount higher than what would have been included in the tax base pursuant to Article 22(2) of Directive 2016/xx/EU, shall be deducted from the apportioned share of the relevant group member in the first tax year of application of the rules of this Directive.
3. Where the share apportioned to a group member in a tax year is not sufficient to offset fully the deductible amounts referred to in paragraphs 1 and 2, the unrelieved amounts shall be carried forward for future years until they are set off against the share apportioned to that group member.
Article 13 - Provisions, revenues and deductions when joining the group
2. Revenues which pursuant to Article 16 of Directive 2016/xx/EU are considered to have accrued before the rules of this Directive became applicable to the taxpayer, but were not yet included in the tax base under the national corporate tax law previously applicable to the taxpayer, shall be added to the apportioned share of the relevant group member in accordance with the timing rules of the national corporate tax law.
3. Expenses incurred after the rules of this Directive became applicable to the taxpayer, but in relation to activities or transactions that were carried out before and for which no deduction was given under the applicable national corporate tax law, shall be deductible only against the apportioned share of the relevant group member, unless those expenses are incurred more than five years after the taxpayer joined the group.
Expenses incurred under national corporate tax law that had not yet been deducted when the rules of this Directive became applicable to the taxpayer shall be deductible only against the apportioned share of the relevant group member, as computed in accordance with this Directive, in equal amounts spread over five years. Expenses that involve borrowing costs shall be deductible in accordance with Article 13 of Directive 2016/xx/EU.
Where the share that has been apportioned to a group member in a tax year is not sufficient to fully deduct the amounts referred to in the first and second subparagraphs, the unrelieved amounts shall be carried forward for future years until they are set off against the apportioned share of that group member.
4. Amounts deducted before the rules of this Directive became applicable to the taxpayer may not be deducted again.
Article 14 - Timing for depreciation when joining or leaving a group
Article 15 - Pre-entry losses
Article 16 - Termination of a group
Article 17 - Depreciation upon termination of a group
Article 18 - Losses after the group terminates
(a)the losses of a taxpayer who opts for applying the rules of Directive 2016/xx/EU shall be carried forward and be set off in accordance with Article 41 of that Directive;
(b)the losses of a taxpayer joining another group shall be carried forward and be set off against the relevant group member’s apportioned share, subject to the restrictions of Article 41(3) of Directive 2016/xx/EU;
(c)the losses of a taxpayer returning to national corporate tax law shall be carried forward and be set off in accordance with the national corporate tax law becoming applicable, as if those losses had arisen while the taxpayer was subject to that law.
Article 19 - Fixed assets when leaving the group
The same rule shall apply to financial assets, with the exception of own shares and of participations that give rise to tax exempt income.
The proceeds of those disposals that are added to the consolidated tax base of the group shall not be taxable otherwise.
Article 20 - Self-generated intangible assets
Article 21 - Losses on leaving the group
CHAPTER V
BUSINESS REORGANISATIONS
Article 22 - Business reorganisations within a group
2. Where, as a result of a business reorganisation or of a series of transactions between group members within a period of two years, substantially all the assets of a taxpayer are transferred to another Member State, leading to a substantial change in the asset factor, the transferred assets shall be attributed to the asset factor of the transferring taxpayer for a maximum period of five years following that transfer as long as a group member continues to be the economic owner of the assets.
3. For the purpose of applying this Article, the transferring taxpayer referred to in paragraph 2 that no longer exists or no longer has a permanent establishment in the Member State from which the assets were transferred shall be considered to have a permanent establishment in that Member State.
Article 23 - Treatment of losses where a business reorganisation takes place between two or more groups
Where two or more group members become part of another group, no unrelieved losses of the first group shall be allocated as referred to in subparagraph 1, provided that the joint value of the asset and labour factors of the departing group members amounts to less than 20 % of the value of these two factors for the entire first group.
2. Where two or more principal taxpayers merge within the meaning of points (i) and (ii) of Article 2(a) of Council Directive 2009/133/EC 15 , any unrelieved losses of a group shall be allocated to its members in accordance with Chapter VIII, on the basis of the factors as they stand at the end of the tax year in which the merger takes place. Unrelieved losses shall be carried forward for future years.
CHAPTER VI
DEALINGS BETWEEN THE GROUP AND OTHER ENTITIES
Article 24 - Disallowance of exempt share disposals
2. The amount excluded from the tax exemption referred to in paragraph 1 shall be the market value of the fixed asset or assets at the moment that the taxpayer leaves the group, less the value for tax purposes of the fixed assets or the costs referred to in Article 19 of Directive 2016/xx/EU.
3. Where the beneficial owner of the shares that were disposed of is a non-taxpayer or a non-resident taxpayer with those shares attributed to its head office or permanent establishment in a third country, the market value of the asset or assets at the time of the disposal of the shares, less the value for tax purposes, shall be deemed to have been received by the taxpayer that held the assets prior to the intra-group transaction referred to in the first paragraph.
Article 25 - Tax credit relief
2. The tax credit referred to in paragraph 1 shall be calculated separately for each Member State or third country as well as for each type of income. It shall not exceed the amount resulting from subjecting the income attributed to a taxpayer or to a permanent establishment to the corporate tax rate of the Member State where the taxpayer is resident for tax purposes or where the permanent establishment is situated.
Article 26 - Withholding tax
CHAPTER VII
TRANSPARENT ENTITIES
Article 27 - Rules for determining transparency in the case of third country entities
CHAPTER VIII
APPORTIONMENT OF THE COMMON CONSOLIDATED CORPORATE TAX BASE
Article 28 - General rules
2. The consolidated tax base of a group shall be shared only where it is positive.
3. The calculations for sharing the consolidated tax base shall be done at the end of the tax year of the group.
4. A period of 15 days or more in a calendar month shall be considered as a whole month.
5. When determining the apportioned share of a group member, equal weight shall be given to the factors of sales, labour and assets.
Article 29 - Safeguard clause
Article 30 - Joining and leaving the group
Article 31 - Transparent entities
Article 32 - Composition of the labour factor
2. The number of employees shall be measured at the end of the tax year.
3. The definition of an employee shall be determined by the national law of the Member State where the employment is exercised.
Article 33 - Allocation of employees and payroll
2. By way of derogation from paragraph 1, where employees physically exercise their employment under the control and responsibility of a group member other than that from which they receive remuneration, those employees as well as the amount of payroll related to them shall be included in the labour factor of the former group member.
This rule shall only apply where all of the following conditions are met:
(a)the employment lasts for an uninterrupted period of at least three months;
(b)those employees represent at least 5 % of the overall number of employees of the group member from which they receive remuneration.
3. Employees shall include persons who, although not employed directly by a group member, perform tasks similar to those performed by employees.
4. Payroll shall include all costs of salaries, wages, bonuses and all other employee compensation, including related pension and social security costs borne by the employer as well as expenses of the employer corresponding to the cost of persons as referred to in paragraph 3.
5. Payroll costs shall be valued at the amount of expenses that are treated as deductible by the employer in a tax year.
Article 34 - Composition of the asset factor
2. In the five years that follow a taxpayer joining an existing or new group, its asset factor shall also include the total amount of costs incurred for research, development, marketing and advertising by the taxpayer over the six years that preceded its joining the group.
Article 35 - Allocation of assets
However, an asset that is not effectively used by its economic owner shall be included in the factor of the group member that effectively uses that asset, provided that the asset represents more than 5 % of the value for tax purposes of all fixed tangible assets of the group member that effectively uses it.
2. Except in the case of leases between group members, leased assets shall be included in the asset factor of the group member that is the lessor or the lessee of the asset. The same shall apply to rented assets.
Article 36 - Valuation
2. An individually depreciable fixed tangible asset shall be valued at the average of its value for tax purposes at the beginning and at the end of a tax year.
Where, as a result of one or more intra-group transactions, an individually depreciable fixed tangible asset is included in the asset factor of a group member for less than a tax year, the value to be taken into account shall be calculated having regard to the number of months that the asset was included in the asset factor of that group member.
3. The pool of fixed assets, as referred to in Article 37 of Directive 2016/xx/EU, shall be valued at the average of its value for tax purposes at the beginning and at the end of a tax year.
4. The renter or lessee of an asset of which it is not the economic owner shall value that rented or leased asset at eight times the net annual rental or lease payment due, less any amounts receivable from sub-rentals or sub-leases.
A group member renting out or leasing an asset of which it is not its economic owner shall value that rented or leased asset at eight times the net annual rental or lease payment due.
5. An asset sold by a group member to a person outside the group following an intra-group transfer in the same or the previous tax year shall be included in the asset factor of the transferring group member for the period between the intra-group transfer and the sale to the person outside the group, except where the group members concerned demonstrate that the intra-group transfer was made for genuine commercial reasons.
Article 37 - Composition of the sales factor
2. Sales shall mean the proceeds of all sales of goods and supplies of services after discounts and returns, excluding value added tax, other taxes and duties. Exempt revenues, interest, dividends, royalties and proceeds from the disposal of fixed assets shall not be included in the sales factor, unless they are revenues earned in the ordinary course of trade or business. Intra-group sales of goods and supplies of services shall not be included in the sales factor.
3. Sales shall be valued in accordance with Article 20 of Directive 2016/xx/EU.
Article 38 - Sales by destination
2. Supplies of services shall be included in the sales factor of the group member located in the Member State where the services are physically carried out or actually supplied.
3. Exempt revenues, interest, dividends and royalties and the proceeds from the disposal of fixed assets that are included in the sales factor shall be attributed to the beneficiary of those revenues, interest, dividends, royalties and proceeds.
4. Where there is no group member in the Member State where the goods are delivered or the services are supplied, or where goods are delivered or services are supplied in a third country, the sales of goods and supplies of services shall be included in the sales factor of all group members in proportion to their labour and asset factors.
5. Where there is more than one group member in the Member State where the goods are delivered or the services are supplied, the sales shall be included in the sales factor of all group members located in that Member State in proportion to their labour and asset factors.
Article 39 - Detailed rules on the calculation of factors
Article 40 - Calculation of the asset and sales factors for financial institutions
2. The sales factor of a financial institution, as referred to in point (29)(a), (d), (e), (f), (g), (h) and (i) of Article 4 of Directive 2016/xx/EU, shall be 10 % of its revenues in the form of interest, fees, commissions and revenues from securities, excluding value added tax, other taxes and duties. Intra-group sales shall not be included. For the purposes of Article 38(2), financial services shall be considered to be carried out, in the case of a secured loan, in the Member State in which the security is situated or, if that Member State cannot be identified, the Member State in which the security is registered. Other financial services shall be considered to be carried out in the Member State of the borrower or of the person who pays fees, commissions or other revenue. Where the borrower or the person who pays fees, commissions or other revenue cannot be identified or if the Member State in which the security is situated or registered cannot be identified, the sales shall be attributed to all group members in proportion to their labour and asset factors.
Article 41 - Calculation of the asset and sales factors for insurance undertakings
2. The sales factor of an insurance undertaking, as referred to in point (29)(b) and (c) of Article 4 of Directive 2016/xx/EU, shall be 10 % of all earned premiums, net of reinsurance, allocated investment returns transferred from the non-technical account, other technical revenues, net of reinsurance, and investment revenues, fees and commissions, excluding value added tax, other taxes and duties. For the purposes of Article 38(2), insurance services shall be considered to be carried out in the Member State of the policy holder. Other sales shall be attributed to all group members in proportion to their labour and asset factors.
Article 42 - Oil and gas
By way of derogation from Article 38(4) and (5), where there is no group member in the Member State of exploration or production of oil and gas or the exploration or production takes place in a third country where the group member that carries on the exploration or production of oil and gas does not maintain a permanent establishment, the sales shall be attributed to that group member.
Article 43 - Shipping, inland waterways transport and air transport
Participations in and by the group member shall be taken into account for the purpose of determining whether there is a group as referred to in Articles 5 and 6.
Article 44 - Items deductible from the apportioned share
(a)unrelieved losses incurred by a taxpayer before becoming subject to the rules of this Directive, as referred to in Article 15;
(b)unrelieved losses incurred at the level of the group, as referred to in Article 15 in conjunction with point (b) of Article 18 and in Article 23;
(c)amounts related to the disposal of fixed assets as referred to in Article 11, revenues and expenses related to long-term contracts as referred to in Article 12 and future expenses as referred to in Article 13(3);
(d)in the case of insurance undertakings, optional technical provisions as referred to in point (d) of Article 28 of Directive 2016/xx/EU;
(e)gifts and donations to charitable bodies which are deductible under national law as referred to in Article 9(4) of Directive 2016/xx/EU;
(f)pension provisions which are deductible under national law as referred to in Article 24 of Directive 2016/xx/EU.
Article 45 - Tax liability
CHAPTER IX
ADMINISTRATION AND PROCEDURES
Article 46 - Notice to create a group
2. The notice referred to in paragraph 1 shall cover all group members, except for the shipping companies referred to in Article 2(4).
3. The principal tax authority shall transmit the notice immediately to the competent authorities of all Member States in which group members are resident for tax purposes or situated in the form of a permanent establishment. Those authorities may submit their views and any relevant information on the validity and scope of the notice to the principal tax authority within one month of its transmission.
4. If no notice is given, the principal tax authority shall issue assessments, within six months of the discovery of the absence of a notice, for the tax years during which the group is deemed to have existed. In no circumstances may these assessments go further than the previous five tax years.
Article 47 - Term of a group
2. A group shall apply the rules of this Directive in so far as it remains liable thereto in accordance with Article 2(1) and (2). The principal taxpayer shall give a notice of termination to the principal tax authority where the group to which it belongs as a whole no longer fulfils the conditions of Article 2(1) and (2) for applying the rules of this Directive.
3. A taxpayer that is no longer subject to the rules of this Directive may opt to continue applying those rules provided that the taxpayer meets the conditions of Article 2(3). That taxpayer may also opt to apply the rules of Directive 2016/xx/EU if it does not meet the condition of point (d) of Article 2(1).
4. The principal taxpayer that has opted to apply the rules of this Directive in accordance with Article 2(3) and that decides to discontinue that application shall notify the principal tax authority at the end of the term of five tax years.
5. The principal taxpayer of a group that has opted to apply the rules of this Directive in accordance with Article 2(3) and that decides to extend that application at the end of the term of five tax years shall provide the principal tax authority with evidence that the conditions under points (a), (b) and (d) of Article 2(1) are met.
Article 48 - Information in the notice to create a group
(a)identification of the group members;
(b)proof of fulfilment of the criteria laid down in Articles 5 and 6;
(c)information on any associated enterprises as referred to in Article 56 of Directive 2016/xx/EU;
(d)the legal form, statutory seat and place of effective management of the taxpayers;
(e)the tax year of the creation of the group.
The Commission may adopt an act establishing a standard form of the notice to create a group. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 77(2).
Article 49 - Examination of the notice to create a group
2. Provided that the taxpayer has fully disclosed all the information required by Article 48, any subsequent determination that the disclosed list of group members is incorrect shall not invalidate the notice to create a group. Any incorrect notice shall be corrected and all other necessary measures shall be taken from the beginning of the tax year in which the error was discovered.
3. Where no full disclosure has been made, the principal tax authority, in agreement with the other competent authorities concerned, may invalidate the original notice, in which case amended assessments of the tax liability of the group/group members shall be issued in accordance with the time limits laid down in Article 56.
Article 50 - Tax year
2. In the year in which it joins a group, a taxpayer shall bring its tax year into line with that of the group it is joining. The apportioned share of the taxpayer for that tax year shall be calculated in proportion to the number of calendar months during which the company belonged to the group.
3. The apportioned share of a taxpayer for the year in which it leaves a group shall be calculated in proportion to the number of calendar months during which the company belonged to the group.
Article 51 - Tax returns and tax assessments
2. The consolidated tax return shall be treated as an assessment of the tax liability of each group member (‘tax assessment’). Where the law of a Member State provides that a tax return has the legal status of a tax assessment and is to be treated as an instrument permitting the enforcement of tax debts, the consolidated tax return shall have the same effect in relation to a group member liable to tax in that Member State.
3. Where the consolidated tax return does not have the legal status of a tax assessment for the purposes of enforcing a tax debt, the competent authority of a Member State may, in respect of a group member that is resident for tax purposes or situated there in the form of a permanent establishment, issue an instrument of national law authorising enforcement in that Member State. That instrument shall incorporate the data in the consolidated tax return concerning the group member. Appeals shall be permitted against the instrument exclusively on grounds of form and not to the underlying tax assessment. The procedure shall be governed by the national law of the relevant Member State.
4. The principal taxpayer shall be responsible for all procedural obligations relating to the taxation of permanent establishments as referred to in Article 11(4) or Article 22(3).
5. The consolidated tax return shall be submitted to the principal tax authority in the nine months that follow the end of the tax year.
Article 52 - Content of the consolidated tax return
(a)identification of the principal taxpayer;
(b)identification of all group members;
(c)identification of any associated enterprises as referred to in Article 56 of Directive 2016/xx/EU;
(d)the tax year to which the tax return relates;
(e)the calculation of the tax base of each group member;
(f)the calculation of the consolidated tax base;
(g)the calculation of the apportioned share of each group member;
(h)the calculation of the tax liability of each group member.
Article 53 - Notification of errors in the consolidated tax return
Article 54 - Failure to file a tax return
Article 55 - Electronic filing, tax returns and supporting documentation
Article 56 - Amended tax assessments
2. Where required, the principal tax authority shall issue an amended tax assessment not later than three years after the final date for submission of the consolidated tax return or, where no return was submitted before that date, not later than three years following issuance of a tax assessment pursuant to Article 54.
An amended tax assessment may not be issued for the same group more than once in any period of twelve months.
3. Paragraph 2 shall not apply where an amended tax assessment is issued as a result of a decision of the courts of the Member State of the principal tax authority as referred to in Article 65 or as a result of a mutual agreement or arbitration procedure with a third country. Those amended tax assessments shall be issued within twelve months of the decision of the courts of the principal tax authority or of the completion of the mutual agreement or arbitration procedure.
4. By way of derogation from paragraph 2, an amended tax assessment may be issued within six years of the final date for filing the consolidated tax return where that is justified by a deliberate or grossly negligent misstatement on the part of the taxpayer, or within twelve years of that date where the misstatement is the subject of criminal proceedings. That amended tax assessment shall be issued within twelve months of the discovery of the misstatement, unless a longer period is objectively justified by the need for further inquiries or investigations. Any such amended tax assessment shall relate solely to the subject matter of the misstatement.
5. Prior to issuing an amended tax assessment, the principal tax authority shall consult the competent authorities of the Member States in which a group member is resident for tax purposes or situated in the form of a permanent establishment. Those authorities may express their views within one month of consultation.
The competent authority of a Member State in which a group member is resident for tax purposes or situated in the form of a permanent establishment may call on the principal tax authority to issue an amended tax assessment. Failure of the principal tax authority to notify within three months of that call to the competent authority that it undertakes to issue that amended tax assessment shall be treated as a refusal.
6. No amended tax assessment shall be issued in order to adjust the consolidated tax base where the difference between the declared consolidated tax base and the corrected consolidated tax base does not exceed the lower of EUR 5,000 or 1 % of the consolidated tax base.
No amended tax assessment shall be issued in order to adjust the calculation of the apportioned shares where the total of the apportioned shares of the group members resident or established in a Member State would be adjusted by less than 0.5 %.
Article 57 - Central database
Article 58 - Change of the principal taxpayer
In exceptional circumstances, the competent tax authorities of the Member States in which the group members are resident or in which they have a permanent establishment may, within six months of the notice referred to in Article 46 or within six months of a reorganisation involving the principal taxpayer, decide by common agreement that a taxpayer other than the taxpayer designated by the group shall be the principal taxpayer.
Article 59 - Record-keeping
Article 60 - Provision of information to the competent authorities
Article 61 - Request for an opinion from the competent authority
The opinion issued by the competent authority shall be binding on it where all relevant information concerning the planned transaction or series of transactions is disclosed, unless the courts of the Member State of the principal tax authority subsequently decide otherwise pursuant to Article 65. A taxpayer disagreeing with the opinion may act in accordance with its own interpretation but must draw attention to that fact in the consolidated tax return.
2. Where two or more group members in different Member States are directly involved in a specific transaction or a series of transactions, or where the request concerns the proposed composition of a group, the competent authorities of those Member States shall agree on a common opinion.
Article 62 - Communication between competent authorities
2. A competent authority that receives a request, pursuant to Council Directive 2011/16/EU 16 , for cooperation or exchange of information concerning a group member shall respond in accordance with the time limits laid down in Article 7 of that Directive.
Article 63 - Secrecy clause
(a)may be made available only to the persons directly involved in the tax assessment or in the administrative control of that tax assessment;
(b)may in addition be made known only in connection with judicial or administrative proceedings that may involve penalties and are undertaken with a view to, or relating to, the preparation or review of a tax assessment and only to persons who are directly involved in those proceedings; that information may, however, be disclosed during public hearings or in judgements if the competent authority of the Member State communicating the information raises no objection;
(c)shall in no circumstances be used for purposes other than taxation or in connection with judicial or administrative proceedings that may involve penalties and are undertaken with a view to, or in relation to, the preparation or review of a tax assessment.
In addition, Member States may provide that the information referred to in the first subparagraph be used for the assessment of other levies, duties and taxes covered by Article 2 of Directive 2011/16/EU.
2. With permission of the competent authority of the Member State communicating information pursuant to Directive 2011/16/EU, and only in so far as this is allowed under the legislation of the Member State of the competent authority receiving the information, information received pursuant to Directive 2011/16/EU may be used for other purposes than those referred to in paragraph 1. Such permission shall be granted if the information can be used for similar purposes in the Member State of the competent authority communicating the information.
Article 64 - Audits
The principal tax authority and the other competent authorities concerned shall jointly determine the scope and content of an audit and the group members to be audited.
2. An audit shall be conducted in accordance with the national legislation of the Member State in which it is carried out, subject to such adjustments as are necessary to ensure a proper implementation of the rules of this Directive. Those audits may include inquiries, inspections or examinations of any kind for the purpose of verifying the compliance of a taxpayer with the rules of this Directive.
3. The principal tax authority shall compile the results of all audits.
Article 65 - Disagreement between Member States
2. The competent authority shall have at least the same procedural rights as those enjoyed by a taxpayer under the law of that Member State in proceedings against a decision of the principal tax authority.
Article 66 - Appeals
(a)a decision rejecting a notice to create a group;
(b)a notice requesting the disclosure of documents or information;
(c)an amended tax assessment;
(d)an assessment of the failure to file a consolidated tax return;
(e)an invalidation of the original notice to create a group by the principal tax authority as referred to in Article 49(2).
The appeal shall be lodged within sixty days of the receipt of the act appealed against.
2. An appeal shall not have any suspensory effect on the tax liability of a taxpayer.
3. By way of derogation from Article 56(2), an amended tax assessment may be issued to give effect to the result of an appeal.
Article 67 - Administrative appeals
2. In making submissions to the administrative body referred to in paragraph 1, the principal tax authority shall act in close consultation with the other competent authorities.
3. The administrative body referred to in paragraph 1 may, where appropriate, order evidence to be provided by the principal taxpayer and the principal tax authority on the fiscal affairs of the group members and other associated enterprises and on the law and practices of the other Member States concerned. The competent authorities of the other Member States concerned shall provide all necessary assistance to the principal tax authority.
4. Where the administrative body referred to in paragraph 1 varies the decision of the principal tax authority, the varied decision shall replace the original decision of the principal tax authority and shall be treated as the decision of that principal tax authority.
5. The administrative body referred to in paragraph 1 shall decide on the appeal within six months. If no decision is received by the principal taxpayer within that period, the decision of the principal tax authority shall be deemed to have been confirmed.
6. Where the decision has been confirmed or varied, the principal taxpayer shall have the right to appeal directly to the courts of the Member State of the principal tax authority within sixty days of the receipt of the decision of the administrative appeals body referred to in paragraph 1.
7. Where the decision is annulled, the administrative body referred to in paragraph 1 shall remit the matter to the principal tax authority. That principal tax authority shall take a new decision within sixty days of the date on which the decision of the administrative body is notified to it. The principal taxpayer may appeal against any such new decision either pursuant to paragraph 1 or directly to the courts of the Member State of the principal tax authority within sixty days of receipt of the decision. If the principal tax authority does not take a new decision within sixty days, the principal taxpayer may appeal against the original decision of the principal tax authority before the courts of the Member State of the principal tax authority.
Article 68 - Judicial appeals
2. In making submissions to the courts, the principal tax authority shall consult with the other competent authorities.
3. A national court may order evidence to be provided by the principal taxpayer and the principal tax authority on the fiscal affairs of the group members and other associated enterprises and on the law and practices of the other Member States concerned. The competent authorities of the other Member States concerned shall provide all necessary assistance to the principal tax authority.
CHAPTER X
INTERACTION WITH DIRECTIVE 2016/xx/EU
Article 69 - Interest limitation rule
2. Where paragraph 1 applies, the exceeding borrowing costs and EBITDA shall be calculated at the level of the group and comprise the results of all group members. The amount of EUR 3 000 000 referred to in Article 13 of Directive 2016/xx/EU shall be increased to 5 000 000.
3. The Commission may adopt delegated acts in accordance with Article 75 to lay down more detailed anti-fragmentation rules for the deductibility of exceeding borrowing costs.
Article 70 - Valuation
Article 71 - Loss relief and recapture
2. Transferred losses which have not yet been recaptured when this Directive enters into force shall remain with the taxpayer to which they have been transferred.
Article 72 - Switch-over
Article 73 - Controlled foreign company legislation
Article 74 - Hybrid mismatches
CHAPTER XI
FINAL PROVISIONS
Article 75 - Exercise of the delegation
2. The power to adopt delegated acts referred to in Articles 2(5), 3 and 69(3) shall be conferred on the Commission for an indeterminate period of time from the date of entry into force of this Directive.
3. The delegation of power referred to in Articles 2(5), 3 and 69(3) may be revoked at any time by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.
4. As soon as it adopts a delegated act, the Commission shall notify it to the Council.
5. A delegated act adopted pursuant to Articles 2(5), 3 and 69(3) shall enter into force only if no objection has been expressed by the Council within a period of three months from the notification of that act to the Council or before the expiry of that period if the Council has informed the Commission that it will not object. That period shall be extended by two months at the initiative of the Council.
Article 76 - Informing the European Parliament
Article 77 - Committee procedure
2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.
Article 78 - Consultations on Article 29
Article 79 - Review
Article 80 - Transposition
They shall apply those provisions from 1st January 2021.
When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.
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.