### (2) article 12a of regulation (eu) no 575/2013 provides that global systemically important institution (g-sii) groups with a resolution strategy under which more than one group entity might be resolved (multiple point of entry (mpe) resolution strategy) are to calculate their risk-based requirement for own funds and eligible liabilities under the theoretical assumption that only one entity of the group would be resolved , with the losses and recapitalisation needs of any subsidiaries of that group being transferred to the resolution entity (single point of entry (spe) resolution strategy). in line with the tlac standard , that calculation should take into account all third-country entities belonging to a g-sii that would be resolution entities were they established in the union. ### (2) article 12a of regulation (eu) no 575/2013 provides that global systemically important institution (g-sii) groups with a resolution strategy under which more than one group entity might be resolved (multiple point of entry (mpe) resolution strategy) are to calculate their risk-based requirement for own funds and eligible liabilities under the theoretical assumption that only one entity of the group would be resolved , with the losses and recapitalisation needs of any subsidiaries of that group being transferred to the resolution entity (single point of entry (spe) resolution strategy). in line with the tlac standard , that calculation should take into account all third-country entities belonging to a g-sii that would be resolution entities were they established in the union , that is , entities which , according to the decision of the third-country resolution authority , are planned to enter into third-country resolution proceedings in case of failure.


### (3) according to article 45h(2) , third subparagraph , of directive 2014/59/eu , and to the tlac standard , the sum of the actual requirements for own funds and eligible liabilities of a g-sii group with an mpe resolution strategy must not be lower than that group’s theoretical requirement under an spe resolution strategy. regulation (eu) no 575/2013 , namely articles 12a and 92a(3) , should be aligned with the corresponding provisions of directive 2014/59/eu and ensure that resolution authorities always act in accordance with that directive and consider both the requirements for own funds and eligible liabilities laid down in regulation (eu) no 575/2013 as well as any additional requirement for own funds and eligible liabilities determined in accordance with article 45d of directive 2014/59/eu. this should not prevent resolution authorities from concluding that any adjustment to minimise or eliminate the difference between the sum of the actual requirements for own funds and eligible liabilities of a g-sii group with an mpe resolution strategy and that group’s theoretical requirement under an spe resolution strategy , when the former is higher than the latter , would be inappropriate or inconsistent with the g-sii’s resolution strategy. ### (3) according to article 45h(2) , third subparagraph , of directive 2014/59/eu , and to the tlac standard , the sum of the actual requirements for own funds and eligible liabilities of a g-sii group with an mpe resolution strategy must not be lower than that group’s theoretical requirement under an spe resolution strategy. regulation (eu) no 575/2013 , namely articles 12a and 92a(3) , should be aligned with the corresponding provisions of directive 2014/59/eu and ensure that resolution authorities always act in accordance with that directive and consider both the requirements for own funds and eligible liabilities laid down in regulation (eu) no 575/2013 as well as any additional requirement for own funds and eligible liabilities determined in accordance with article 45d of directive 2014/59/eu. this should not prevent resolution authorities from concluding that any adjustment to minimise or eliminate the difference between the sum of the actual requirements for own funds and eligible liabilities of a g-sii group with an mpe resolution strategy and that group’s theoretical requirement under an spe resolution strategy , when the former is higher than the latter , would be inappropriate or inconsistent with the g-sii’s resolution strategy. to ensure consistency between article 12a of regulation (eu) no 575/2013 and article 45h(2) of directive 2014/59/eu , the calculation referred to in article 45h(2) of that directive should also take into account the loss absorbency requirements of all third-country entities belonging to a g-sii that would be resolution entities if they were established in the union.


### (5) according to article 72e(4) , first subparagraph , of regulation (eu) no 575/2013 , resolution authorities may permit a g-sii with an mpe resolution strategy to deduct certain holdings of own funds and eligible liabilities instruments of its subsidiaries that do not belong to the same resolution group by deducting a lower , adjusted amount specified by the resolution authority. article 72e(4) , second subparagraph , of that regulation requires that in such cases , the difference between the adjusted amount and the original amount is deducted from the loss absorbing and recapitalisation capacity of the subsidiaries concerned. in line with the tlac standard , that approach should take into account the risk-based and non-risk-based requirements for own funds and eligible liabilities of the subsidiary concerned. furthermore , that approach should be applicable to all third-country subsidiaries belonging to that g-sii , as long as those subsidiaries are subject to a local resolution regime that is equivalent to internationally agreed standards. ### (5) according to article 72e(4) , first subparagraph , of regulation (eu) no 575/2013 , resolution authorities may permit a g-sii with an mpe resolution strategy to deduct certain holdings of own funds and eligible liabilities instruments of its subsidiaries that do not belong to the same resolution group by deducting a lower , adjusted amount specified by the resolution authority. article 72e(4) , second subparagraph , of that regulation requires that in such cases , the difference between the adjusted amount and the original amount is deducted from the loss absorbing and recapitalisation capacity of the subsidiaries concerned. in line with the tlac standard , that approach should take into account the risk-based and non-risk-based requirements for own funds and eligible liabilities of the subsidiary concerned. furthermore , that approach should be applicable to all third-country subsidiaries belonging to that g-sii , as long as those subsidiaries are subject to a local resolution regime that according to the relevant eu resolution authority is materially at least fully equivalent to internationally agreed standards , more specifically the financial stability board’s ‘key attributes of effective resolution regimes for financial institutions’1a and the tlac standard , and where the third-country resolution authorities have issued decisions that the third-country subsidiaries of that g-sii are planned to enter into third-country resolution proceedings in case of failure.


### (5) according to article 72e(4) , first subparagraph , of regulation (eu) no 575/2013 , resolution authorities may permit a g-sii with an mpe resolution strategy to deduct certain holdings of own funds and eligible liabilities instruments of its subsidiaries that do not belong to the same resolution group by deducting a lower , adjusted amount specified by the resolution authority. article 72e(4) , second subparagraph , of that regulation requires that in such cases , the difference between the adjusted amount and the original amount is deducted from the loss absorbing and recapitalisation capacity of the subsidiaries concerned. in line with the tlac standard , that approach should take into account the risk-based and non-risk-based requirements for own funds and eligible liabilities of the subsidiary concerned. furthermore , that approach should be applicable to all third-country subsidiaries belonging to that g-sii , as long as those subsidiaries are subject to a local resolution regime that is equivalent to internationally agreed standards. ### (5) according to article 72e(4) , first subparagraph , of regulation (eu) no 575/2013 , resolution authorities may permit a g-sii with an mpe resolution strategy to deduct certain holdings of own funds and eligible liabilities instruments of its subsidiaries that do not belong to the same resolution group by deducting a lower , adjusted amount specified by the resolution authority. article 72e(4) , second subparagraph , of that regulation requires that in such cases , the difference between the adjusted amount and the original amount is deducted from the loss absorbing and recapitalisation capacity of the subsidiaries concerned. in line with the tlac standard , that approach should take into account the risk-based and non-risk-based requirements for own funds and eligible liabilities of the subsidiary concerned. furthermore , that approach should be applicable to all third-country subsidiaries belonging to that g-sii , as long as those subsidiaries are subject to a local resolution regime that is equivalent to internationally agreed standards , more specifically the financial stability board’s ‘key attributes of effective resolution regimes for financial institutions’1a and the tlac standard , and where the third-country resolution authorities have issued decisions that the third-country subsidiaries of that g-sii are planned to enter into third-country resolution proceedings in case of failure.


### (5) according to article 72e(4) , first subparagraph , of regulation (eu) no 575/2013 , resolution authorities may permit a g-sii with an mpe resolution strategy to deduct certain holdings of own funds and eligible liabilities instruments of its subsidiaries that do not belong to the same resolution group by deducting a lower , adjusted amount specified by the resolution authority. article 72e(4) , second subparagraph , of that regulation requires that in such cases , the difference between the adjusted amount and the original amount is deducted from the loss absorbing and recapitalisation capacity of the subsidiaries concerned. in line with the tlac standard , that approach should take into account the risk-based and non-risk-based requirements for own funds and eligible liabilities of the subsidiary concerned. furthermore , that approach should be applicable to all third-country subsidiaries belonging to that g-sii , as long as those subsidiaries are subject to a local resolution regime that is equivalent to internationally agreed standards. ### (5) according to article 72e(4) , first subparagraph , of regulation (eu) no 575/2013 , resolution authorities may permit a g-sii with an mpe resolution strategy to deduct certain holdings of own funds and eligible liabilities instruments of its subsidiaries that do not belong to the same resolution group by deducting a lower , adjusted amount specified by the resolution authority. article 72e(4) , second subparagraph , of that regulation requires that in such cases , the difference between the adjusted amount and the original amount is deducted from the loss absorbing and recapitalisation capacity of the subsidiaries concerned. in line with the tlac standard , that approach should take into account the risk-based and non-risk-based requirements for own funds and eligible liabilities of the subsidiary concerned. furthermore , that approach should be applicable to all third-country subsidiaries belonging to that g-sii , as long as those subsidiaries are subject to a local resolution regime that , according to the relevant eu resolution authority , is legally enforceable and implements internationally agreed standards.


### (6) to operationalise the approach of indirect subscription of internal mrel eligible instruments within resolution groups and to ensure that that approach is prudentially sound , the european banking authority (eba) was mandated under article 45f(6) of directive 2014/59/eu to develop draft regulatory technical standards to specify a methodology for such an indirect issuance of eligible instruments. however , as highlighted by the eba in its letter to the commission dated 25 january 2021 , there were several inconsistencies between the requirements for the delegation laid down in directive 2014/59/eu and the existing prudential rules laid down in regulation (eu) no 575/2013 , which did not allow the application of the prudential treatment needed for the mandate to be fulfilled as originally intended. more precisely , the eba noted that regulation (eu) no 575/2013 did not allow for the deduction of internal mrel eligible instruments and , subsequently , for the application of an appropriate risk weight in all the cases relevant for the mandate under directive 2014/59/eu. similar issues were identified in the area of the leverage ratio requirement laid down in regulation (eu) no 575/2013. in light of those legal constraints , the methodology developed by the eba should be incorporated directly into regulation (eu) no 575/2013. consequently , the mandate to develop draft regulatory technical standards set out in article 45f(6) of directive 2014/59/eu should be deleted. ### (6) to operationalise the approach of indirect subscription of internal mrel eligible instruments within resolution groups and to ensure that that approach is prudentially sound , the european banking authority (eba) was mandated under article 45f(6) of directive 2014/59/eu , as amended by directive (eu) 2019/879 , to develop draft regulatory technical standards to specify a methodology for such an indirect subscription of eligible instruments. however , as highlighted by the eba in its letter to the commission dated 25 january 2021 , there were several inconsistencies between the requirements for the delegation laid down in directive 2014/59/eu and the existing prudential rules laid down in regulation (eu) no 575/2013 , which did not allow the application of the prudential treatment needed for the mandate to be fulfilled as originally intended. more precisely , the eba noted that regulation (eu) no 575/2013 did not allow for the deduction of internal mrel eligible instruments and , subsequently , for the application of an appropriate risk weight in all the cases relevant for the mandate under directive 2014/59/eu. similar issues were identified in the area of the leverage ratio requirement laid down in regulation (eu) no 575/2013. in light of those legal constraints , the methodology developed by the eba should be incorporated directly into regulation (eu) no 575/2013. consequently , the mandate to develop draft regulatory technical standards set out in article 45f(6) of directive 2014/59/eu , as amended by directive (eu) 2019/879 , should be deleted.


### (7) in the context of the indirect subscription of internal mrel eligible instruments by resolution entities pursuant to the revised union bank resolution framework , intermediate parents should be required to deduct from their own internal mrel eligible resources the full holding of own funds and eligible liabilities issued by their subsidiaries belonging to the same resolution group. this ensures the proper functioning of the internal loss-absorbing and recapitalisation mechanisms within a group and avoids the double-counting of the internal mrel eligible resources of the subsidiary for the purposes of compliance by the intermediate parent with its own internal mrel. additionally , without those deductions , the individual solvency ratios of intermediate parents would not reflect appropriately and prudently their actual loss-absorbing capacity , as those ratios would also include the loss-absorbing capacity of their subsidiaries. this could compromise the proper implementation of the chosen resolution strategy , as the intermediate parent could use up not only its own loss absorption capacity but also that of its subsidiary , before the intermediate parent or the subsidiary are no longer viable. the deductions should first be applied to the eligible liabilities items of the intermediate parents. in case the amount to be deducted would exceed the amount of the eligible liabilities items of the intermediate parents , the remaining amount should be deducted from their tier 2 items. to ensure that the deduction regime remains proportionate , that regime should not be applicable in the exceptional cases where internal mrel is applied on a consolidated basis only. ### (7) in the context of the indirect subscription of internal mrel eligible instruments by resolution entities pursuant to the revised union bank resolution framework , intermediate parents should be required to deduct from their own internal mrel eligible resources the full holding of own funds and eligible liabilities that meet the conditions of article 45f(2) of directive 2014/59/eu issued by their subsidiaries belonging to the same resolution group. this ensures the proper functioning of the internal loss-absorbing and recapitalisation mechanisms within a group and avoids the double-counting of the internal mrel eligible resources of the subsidiary for the purposes of compliance by the intermediate parent with its own internal mrel. to ensure that the deduction regime remains proportionate , intermediate parents should be able to choose the mix of instruments (own funds versus eligible liabilities) with which they fund the acquisition of ownership of internal mrel eligible resources. this would allow intermediate parents to completely avoid any own funds related deductions as long as they have issued sufficient eligible liabilities. the deductions should therefore first be applied to the eligible liabilities items of the intermediate parents. where the intermediate entity is required to comply with internal mrel pursuant to directive 2014/59/eu on an individual basis , the deductions should be applied to the eligible liabilities meeting the conditions of article 45f(2) of that directive. in case the amount to be deducted would exceed the amount of the eligible liabilities items of the intermediate parents , the remaining amount should be deducted from their common equity tier 1 , additional tier 1 and tier 2 items , starting with tier 2 items in accordance with article 66 , point (e) , of regulation (eu) no 575/2013. in such a case , it is necessary that the deductions corresponding to the remaining amount are also applied when calculating own funds for the purposes of the requirements laid down in regulation (eu) no 575/2013 and directive 2013/36/eu1a. otherwise , the solvency ratios of intermediate entities that have issued own funds instruments , rather than eligible liabilities instruments , to fund the acquisition of ownership of internal mrel eligible resources may be overstated. additionally , by keeping the treatment of holdings of internal mrel eligible resources aligned for prudential and resolution purposes , an undue increase in complexity is avoided , as institutions would be able to continue to calculate , report and disclose one set of total risk exposure amount and total exposure measure for prudential and resolution purposes. article 49(2) of regulation (eu) no 575/2013 should thus be amended accordingly. to further enhance the proportionality of the deduction regime , that regime should not be applicable in the exceptional cases where , pursuant to articles 45f(1) , third subparagraph , and 45f(4) of directive 2014/59/eu , internal mrel is applied on a consolidated basis only , in what concerns the holdings of internal mrel eligible resources issued by entities included in the perimeter of consolidation. the same exception should apply when the requirement for own funds and eligible liabilities for material subsidiaries of non-eu g-siis laid down in article 92b of regulation (eu) no 575/2013 is complied with on a consolidated basis , pursuant to article 11(3a) of regulation (eu) no 575/2013.


### (7) in the context of the indirect subscription of internal mrel eligible instruments by resolution entities pursuant to the revised union bank resolution framework , intermediate parents should be required to deduct from their own internal mrel eligible resources the full holding of own funds and eligible liabilities issued by their subsidiaries belonging to the same resolution group. this ensures the proper functioning of the internal loss-absorbing and recapitalisation mechanisms within a group and avoids the double-counting of the internal mrel eligible resources of the subsidiary for the purposes of compliance by the intermediate parent with its own internal mrel. additionally , without those deductions , the individual solvency ratios of intermediate parents would not reflect appropriately and prudently their actual loss-absorbing capacity , as those ratios would also include the loss-absorbing capacity of their subsidiaries. this could compromise the proper implementation of the chosen resolution strategy , as the intermediate parent could use up not only its own loss absorption capacity but also that of its subsidiary , before the intermediate parent or the subsidiary are no longer viable. the deductions should first be applied to the eligible liabilities items of the intermediate parents. in case the amount to be deducted would exceed the amount of the eligible liabilities items of the intermediate parents , the remaining amount should be deducted from their tier 2 items. to ensure that the deduction regime remains proportionate , that regime should not be applicable in the exceptional cases where internal mrel is applied on a consolidated basis only. ### (7) in the context of the indirect subscription of internal mrel eligible instruments by resolution entities pursuant to the revised union bank resolution framework , intermediate parents should be required to deduct from their own internal mrel eligible resources the holding of own funds and eligible liabilities , according to internal mrel requirements , issued by their subsidiaries belonging to the same resolution group. this ensures the proper functioning of the internal loss-absorbing and recapitalisation mechanisms within a group and avoids the double-counting of the internal mrel eligible resources of the subsidiary for the purposes of compliance by the intermediate parent with its own internal mrel. additionally , without those deductions , the individual solvency ratios of intermediate parents would not reflect appropriately and prudently their actual loss-absorbing capacity , as those ratios would also include the loss-absorbing capacity of their subsidiaries. this could compromise the proper implementation of the chosen resolution strategy , as the intermediate parent could use up not only its own loss absorption capacity but also that of its subsidiary , before the intermediate parent or the subsidiary are no longer viable. the deductions should first be applied to the eligible liabilities items of the intermediate parents. in case the amount to be deducted would exceed the amount of the eligible liabilities items of the intermediate parents , the remaining amount should be deducted from their tier 2 items. to ensure that the deduction regime remains proportionate , that regime should not be applicable in the exceptional cases where internal mrel is applied on a consolidated basis only.


### (8) the indirect subscription of internal mrel eligible instruments should ensure that , when a subsidiary reaches the point of non-viability , losses are effectively passed on to , and the subsidiary concerned is recapitalised by , the resolution entity. those losses should thus not be absorbed by the intermediate parent , which should become a mere vehicle to pass through those losses to the resolution entity. consequently , and to ensure that the outcome of the indirect subscription is equivalent to that of a full direct subscription , as envisaged under the mandate set out in article 45f(6) of directive 2014/59/eu , the deducted exposures should receive a 0 % risk weight for the calculation of the total risk exposure amount and be excluded from the calculation of the total exposure measure. ### (8) the indirect subscription of internal mrel eligible instruments should ensure that , when a subsidiary reaches the point of non-viability , losses are effectively passed on to , and the subsidiary concerned is recapitalised by , the resolution entity. those losses should thus not be absorbed by the intermediate parent , which should become a mere vehicle to pass through those losses to the resolution entity. consequently , and to ensure that the outcome of the indirect subscription is equivalent to that of a full direct subscription , as envisaged under the mandate set out in article 45f(6) of directive 2014/59/eu , the deducted exposures should receive a 0 % risk weight for the calculation of the total risk exposure amount and be excluded from the calculation of the total exposure measure. this treatment of not applying risk weights and excluding those exposures from the total exposure measure should strictly be limited to exposures that are deducted in accordance to article 72e(5) , first subparagraph , for the sake of operationalising the approach of indirect subscription of internal mrel eligible instruments.


### (10) to ensure that institutions have sufficient time to implement the dedicated treatment for the indirect subscription of instruments eligible for internal mrel , including the new deduction regime , the provisions laying down that treatment should become applicable six months after the entry into force of this regulation. ### (10) to ensure that institutions have sufficient time to implement the dedicated treatment for the indirect subscription of instruments eligible for internal mrel , including the new deduction regime , and that markets can digest additional issuances of internal mrel eligible resources , where needed , the provisions laying down that treatment should become applicable on 1 january 2024 , in line with the deadline for compliance with the final mrel requirements.


### (10) to ensure that institutions have sufficient time to implement the dedicated treatment for the indirect subscription of instruments eligible for internal mrel , including the new deduction regime , the provisions laying down that treatment should become applicable six months after the entry into force of this regulation. ### (10) to ensure that institutions have sufficient time to implement the dedicated treatment for the indirect subscription of instruments eligible for internal mrel , including the new deduction regime , the provisions laying down that treatment should become applicable three months after the entry into force of this regulation.


### (130a) ‘relevant third-country authority’ means a third-country authority as defined in article 2(1) , point (90) , of directive 2014/59/eu; ### (130a) ‘relevant third-country authority’ means a third-country authority as defined in article 2(1) , point (90) , of directive 2014/59/eu , taking into account the requirements of article 33 of regulation (eu) no 1093/2010.


### where at least two g-sii entities belonging to the same g-sii are resolution entities or third-country entities that would be resolution entities if they were established in the union , the eu parent institution of that g-sii shall calculate the amount of own funds and eligible liabilities referred to in article 92a(1) , point (a). that calculation shall be undertaken on the basis of the consolidated situation of the eu parent institution as if it were the only resolution entity of the g-sii. ### where at least two g-sii entities belonging to the same g-sii are resolution entities or third-country entities that would be resolution entities if they were established in the union , the eu parent institution of that g-sii shall calculate the amount of own funds and eligible liabilities referred to in article 92a(1) , point (a) , for the following entities:


### resolution authorities shall act in accordance with article 45d(4) and article 45h(2) of directive 2014/59/eu.; ### resolution authorities shall act in accordance with articles 45d(4) and 45h(2) of directive 2014/59/eu.;


### 4. where an eu parent institution or a parent institution in a member state that is subject to article 92a has direct , indirect or synthetic holdings of own funds instruments or eligible liabilities instruments of one or more subsidiaries which do not belong to the same resolution group as that parent institution , the resolution authority of that parent institution , after duly considering the opinion of the resolution authorities or relevant third-country authorities of any subsidiaries concerned , may permit the parent institution to deduct such holdings by deducting a lower amount specified by the resolution authority of that parent institution. that adjusted amount shall be at least equal to the amount (m) calculated as follows: ### 4. where an eu parent institution or a parent institution in a member state that is subject to article 92a has direct , indirect or synthetic holdings of own funds instruments or eligible liabilities instruments of one or more subsidiaries which are resolution entities or which are third-country entities planned to enter into third-country resolution proceedings in case of failure which do not belong to the same resolution group as that parent institution , the resolution authority of that parent institution , after duly considering the opinion of the resolution authorities or relevant third-country authorities of any subsidiaries concerned , may permit the parent institution to deduct such holdings by deducting a lower amount specified by the resolution authority of that parent institution. that adjusted amount shall be at least equal to the amount (m) calculated as follows:


### ri = the ratio applicable to subsidiary i at the level of its resolution group in accordance with article 92a(1) , point (a) , of this regulation and article 45c(3) , first subparagraph , point (a) , of directive 2014/59/eu or , for third-country subsidiaries , an equivalent resolution requirement applicable to subsidiary i in the third country where it has its head office , insofar as that requirement is met with instruments that would be considered own funds or eligible liabilities under this regulation; ### ri = the ratio applicable to subsidiary i at the level of its resolution group in accordance with article 92a(1) , point (a) , of this regulation and article 45c(3) , first subparagraph , point (a) , of directive 2014/59/eu or , for third-country subsidiaries , in accordance with legally enforceable national law implementing internationally agreed standards , applicable to subsidiary i in the third country where it has its head office , insofar as that requirement is met with instruments that would be considered own funds under this regulation or eligible liabilities in accordance with the international standards of the fsb;


### ri = the ratio applicable to subsidiary i at the level of its resolution group in accordance with article 92a(1) , point (a) , of this regulation and article 45c(3) , first subparagraph , point (a) , of directive 2014/59/eu or , for third-country subsidiaries , an equivalent resolution requirement applicable to subsidiary i in the third country where it has its head office , insofar as that requirement is met with instruments that would be considered own funds or eligible liabilities under this regulation; ### ri = the ratio applicable to subsidiary i at the level of its resolution group in accordance with article 92a(1) , point (a) , of this regulation and article 45c(3) , first subparagraph , point (a) , of directive 2014/59/eu or , for third-country subsidiaries , a materially at least fully equivalent resolution requirement applicable to subsidiary i in the third country where it has its head office , insofar as that requirement is met with instruments that would be considered own funds or eligible liabilities under this regulation;


### arwai = the total risk exposure amount of the g-sii entity i calculated in accordance with article 92(3) , taking into account the adjustments set out in article 12a; ### arwai = the total risk exposure amount of the g-sii entity i calculated in accordance with article 92(3) , taking into account the adjustments set out in article 12a of this regulation , or , for third-country subsidiaries , calculated in accordance with the applicable national law;


### wi = the ratio applicable to subsidiary i at the level of its resolution group in accordance with article 92a(1) , point (b) , of this regulation and of article 45c(3) , first subparagraph , point (b) , of directive 2014/59/eu or , for third-country subsidiaries , an equivalent resolution requirement applicable to subsidiary i in the third country where it has its head office , insofar as that requirement is met with instruments that would be considered own funds or eligible liabilities under this regulation; ### wi = the ratio applicable to subsidiary i at the level of its resolution group in accordance with article 92a(1) , point (b) , of this regulation and of article 45c(3) , first subparagraph , point (b) , of directive 2014/59/eu or , for third-country subsidiaries , a resolution requirement applicable to subsidiary i in the third country where it has its head office , insofar as that requirement is met with instruments that would be considered own funds under this regulation or eligible liabilities in accordance with international standards;


### wi = the ratio applicable to subsidiary i at the level of its resolution group in accordance with article 92a(1) , point (b) , of this regulation and of article 45c(3) , first subparagraph , point (b) , of directive 2014/59/eu or , for third-country subsidiaries , an equivalent resolution requirement applicable to subsidiary i in the third country where it has its head office , insofar as that requirement is met with instruments that would be considered own funds or eligible liabilities under this regulation; ### wi = the ratio applicable to subsidiary i at the level of its resolution group in accordance with article 92a(1) , point (b) , of this regulation and of article 45c(3) , first subparagraph , point (b) , of directive 2014/59/eu or , for third-country subsidiaries , a materially at least fully equivalent resolution requirement applicable to subsidiary i in the third country where it has its head office , insofar as that requirement is met with instruments that would be considered own funds or eligible liabilities under this regulation;


### alrei = the total exposure measure of the g-sii entity i calculated in accordance with article 429(4). ### alrei = the total exposure measure of the g-sii entity i calculated in accordance with article 429(4) of this regulation , or , for third-country subsidiaries , calculated in accordance with the applicable national law.


### institutions and entities required to comply with article 45c of directive 2014/59/eu that are not themselves resolution entities shall deduct from eligible liabilities items their holdings of own funds and eligible liabilities that meet the conditions of article 45f(2) of that directive of their subsidiaries that belong to the same resolution group. ### institutions and entities required to comply with article 45c of directive 2014/59/eu that are not themselves resolution entities shall deduct from eligible liabilities items their holdings of own funds instruments and eligible liabilities instruments that meet the conditions of article 45f(2) of that directive of their subsidiaries that belong to the same resolution group.


### for the purposes of this paragraph , the reference to eligible liabilities items shall also be understood as a reference to eligible liabilities referred to in article 45f(2) , point (a) , of directive 2014/59/eu. ### for the purposes of this paragraph , the deduction of own funds instruments and eligible liabilities instruments shall be limited to the intermediate entities holdings of eligible instruments of the lower subsidiaries up to the lower subsidiaries’ loss absorption amount and recapitalisation amount as defined in article 45 (2) (a) and (b) of directive 2014/59/eu.


### 1. to calculate risk-weighted exposure amounts , risk weights shall be applied to all exposures , unless deducted from own funds or subject to the treatment set out in article 72e(5) , first subparagraph , in accordance with the provisions of section 2. the application of risk weights shall be based on the exposure class to which the exposure is assigned and , to the extent specified in section 2 , its credit quality. credit quality may be determined by reference to the credit assessments of ecais or the credit assessments of export credit agencies in accordance with section 3.; ### 1. to calculate risk-weighted exposure amounts , risk weights shall be applied to all exposures , unless deducted from own funds or eligible liabilities subject to the treatment set out in article 72e(4) and article 72e(5) , first subparagraph , in accordance with the provisions of section 2. the application of risk weights shall be based on the exposure class to which the exposure is assigned and , to the extent specified in section 2 , its credit quality. credit quality may be determined by reference to the credit assessments of ecais or the credit assessments of export credit agencies in accordance with section 3.;


### 1. to calculate risk-weighted exposure amounts , risk weights shall be applied to all exposures , unless deducted from own funds or subject to the treatment set out in article 72e(5) , first subparagraph , in accordance with the provisions of section 2. the application of risk weights shall be based on the exposure class to which the exposure is assigned and , to the extent specified in section 2 , its credit quality. credit quality may be determined by reference to the credit assessments of ecais or the credit assessments of export credit agencies in accordance with section 3.; ### 1. to calculate risk-weighted exposure amounts , risk weights shall be applied to all exposures , unless the exposure amounts are deducted from own funds or subject to the treatment set out in article 72e(5) , first subparagraph , in accordance with the provisions of section 2. the application of risk weights shall be based on the exposure class to which the exposure is assigned and , to the extent specified in section 2 , its credit quality. credit quality may be determined by reference to the credit assessments of ecais or the credit assessments of export credit agencies in accordance with section 3.;


### 1. the risk-weighted exposure amounts for credit risk for exposures belonging to one of the exposure classes referred to in article 147(2) , points (a) to (e) and point (g) , shall , unless deducted from own funds or subject to the treatment set out in article 72e(5) , first subparagraph , be calculated in accordance with sub-section 2.; ### 1. the risk-weighted exposure amounts for credit risk for exposures belonging to one of the exposure classes referred to in article 147(2) , points (a) to (e) and point (g) , shall , unless deducted from own funds or eligible liabilities subject to the treatment set out in article 72e(4) and article 72e(5) , first subparagraph , be calculated in accordance with sub-section 2.;


### 1. the risk-weighted exposure amounts for credit risk for exposures belonging to one of the exposure classes referred to in article 147(2) , points (a) to (e) and point (g) , shall , unless deducted from own funds or subject to the treatment set out in article 72e(5) , first subparagraph , be calculated in accordance with sub-section 2.; ### 1. the risk-weighted exposure amounts for credit risk for exposures belonging to one of the exposure classes referred to in article 147(2) , points (a) to (e) and point (g) , shall , unless the exposure amounts are deducted from own funds or subject to the treatment set out in article 72e(5) , first subparagraph , be calculated in accordance with sub-section 2.;


### the amounts that are subject to the treatment set out in article 72e(5) , first subparagraph. ### the amounts that are subject to the treatment set out in article 72e(4) and article 72e(5) , first subparagraph.


### the amounts that are subject to the treatment set out in article 72e(5) , first subparagraph. ### the exposure amounts that are subject to the treatment set out in article 72e(5) , first subparagraph.


### amendment to directive 2014/59/eu ### amendments to directive 2014/59/eu


### however , article 1 , point (3) , point (5)(b) , and points (7) , (8) and (9) and article 2 shall apply from [op please insert the date = 6 months after date of entry into force]. ### however , article 1 , point (3) , point (5)(b) , and points (7) , (8) and (9) and article 2 shall apply from 1 january 2024.


### however , article 1 , point (3) , point (5)(b) , and points (7) , (8) and (9) and article 2 shall apply from [op please insert the date = 6 months after date of entry into force]. ### however , article 1 , point (3) , point (5)(b) , and points (7) , (8) and (9) and article 2 shall apply from [op please insert the date = 3 months after date of entry into force of this amending regulation].


### (4) to ensure a comprehensive approach , the rules should apply to all undertakings in the union which are taxable in a member state , regardless of their legal form and status , as long as they have their residence for tax purposes in a member state and are eligible to obtain a certificate of tax residence in that member state. ### (4) to ensure a comprehensive approach , the rules should apply to all undertakings in the union which are taxable in a member state , regardless of their legal form and status , as long as they have their residence for tax purposes in a member state and are eligible to obtain a certificate of tax residence in that member state. this broad scope is , therefore , mitigated by a set of standards regarding the economic activity of the undertakings comprehended in this directive.


### (6) it would be fair to exclude from the envisaged rules undertakings whose activities are subject to an adequate level of transparency and therefore do not present a risk of lacking substance for tax purposes. companies having a transferable security admitted to trading or listed on a regulated market or multilateral trading facility as well as certain financial undertakings which are heavily regulated in the union , directly or indirectly , and subject to increased transparency requirements and supervision , should equally be excluded from the scope of this directive. pure holding undertakings which are situated in the same jurisdiction as the operational subsidiary and their beneficial owner(s) are not likely to serve the objective of obtaining a tax advantage either. similar is the case of sub-holding undertakings which are situated in the same jurisdiction as their shareholder or ultimate parent entity. on this basis , they should also be excluded. undertakings that engage an adequate number of persons , full-time and exclusively , in order to carry out their activities should equally not be considered to lack minimal substance. while they are not reasonably expected to pass the gateway criterion , they should be excluded explicitly for purposes of legal certainty. ### (6) it is fair and proportionate to exclude from the envisaged rules undertakings whose activities are subject to an adequate level of transparency and therefore do not present a risk of lacking substance for tax purposes. companies having a transferable security admitted to trading or listed on a regulated market or multilateral trading facility as well as certain financial undertakings which are heavily regulated in the union , directly or indirectly , and subject to increased transparency requirements and supervision , should equally be excluded from the scope of this directive. pure holding undertakings which are situated in the same jurisdiction as the operational subsidiary and their beneficial owner(s) are not likely to serve the objective of obtaining a tax advantage either. similar is the case of sub-holding undertakings which are situated in the same jurisdiction as their shareholder or ultimate parent entity. on this basis , they should also be excluded. undertakings that engage an adequate number of persons , full-time and exclusively , in order to carry out their activities should equally not be considered to lack minimal substance. while they are not reasonably expected to pass the gateway criterion , they should be excluded explicitly for purposes of legal certainty.


### (8) to facilitate implementation of this directive , undertakings at risk of being found to lack substance and used with the main objective of obtaining a tax advantage should declare , in their annual tax return , that they possess a minimum level of resources such as people and premises in the member state of tax residence and provide documentary evidence if that is the case. while it is recognised that different activities may require a different level or type of resources , a common minimum level of resources would be expected under all circumstances. this assessment should solely aim at identifying the substance of undertakings for tax purposes and does not question the role that “trust or company service providers” , as defined in directive (eu) 2015/849 of the european parliament and of the council12 , have in the identification of money laundering , its predicate offences and terrorist financing. conversely , the absence of a minimum level of resources may be considered to indicate a lack of substance where an undertaking is already at risk of being found to lack substance for tax purposes. to ensure compatibility with relevant international standards , a common minimum level should draw on the existing union and international standards on substantial economic activity in the context of preferential tax regimes or in the absence of corporate taxation13 , as developed in the context of the forum on harmful tax practices. it is necessary to provide for submission of documentary evidence with the tax return in support of the declaration of the undertaking that it disposes a minimum of resources. it is also necessary in order to allow the administration to form a view based on the facts and circumstances of the undertaking and decide whether to initiate an audit procedure. ### (8) to facilitate implementation of this directive , undertakings comprehended in the scope of this directive and at risk of being found to lack substance and used with the main objective of obtaining a tax advantage should declare , in their annual tax return , that they possess a minimum level of resources , namely people and premises in the member state of tax residence , and provide documentary evidence when necessary and adequate. while it is recognised that different activities may require a different level or type of resources , a common minimum level of resources would be expected under all circumstances. this assessment should solely aim at identifying the substance of undertakings for tax purposes and does not question the role that “trust or company service providers” , as defined in directive (eu) 2015/849 of the european parliament and of the council12 , have in the identification of money laundering , its predicate offences and terrorist financing. conversely , the absence of a minimum level of resources may be considered to indicate a lack of substance where an undertaking is already at risk of being found to lack substance for tax purposes. to ensure compatibility with relevant international standards , a common minimum level should draw on the existing union and international standards on substantial economic activity in the context of preferential tax regimes or in the absence of corporate taxation13 , as developed in the context of the forum on harmful tax practices. it is necessary to provide for submission of documentary evidence with the tax return in support of the declaration of the undertaking that it disposes a minimum of resources. it is also necessary in order to allow the administration to form a view based on the facts and circumstances of the undertaking and decide whether to initiate an audit procedure , when such diligence is legally necessary and proportionate.


### (9) to ensure tax certainty , it is imperative to lay down common rules on the content of undertakings’ declarations. undertakings that pass the gateway criterion and are consequently subject to reporting requirements should be presumed not to have sufficient substance for tax purposes if they also declare not to possess one or more of the elements that cumulatively constitute a minimum level of substance , or do not provide the required supporting evidence. undertakings that declare to possess all the elements of the minimum level of substance and provide the required supporting documentation should instead be presumed to have minimal substance for tax purposes and should incur no further obligations and consequences under this directive. this , however , should be without prejudice to any applicable law and the right of the administration to perform an audit , including on the basis of the supporting documentation , and possibly , arrive at a different conclusion. ### (9) to ensure tax certainty and stability , it is imperative to lay down common rules on the content of undertakings’ declarations. undertakings that pass the gateway criterion and are consequently subject to reporting requirements should be presumed not to have sufficient substance for tax purposes if they also declare not to possess one or more of the elements that cumulatively constitute a minimum level of substance , or do not provide the required supporting evidence. undertakings that declare to possess all the elements of the minimum level of substance and provide the required supporting documentation should instead be presumed to have minimal substance for tax purposes and should incur no further obligations and consequences under this directive. this , however , should be without prejudice to any applicable law and the right of the administration to perform an audit , including on the basis of the supporting documentation.


### (10) it is recognised that whether an undertaking is actually performing economic activities for tax purposes or serves mainly tax avoidance or evasion purposes is ultimately a matter of facts and circumstances. this should be assessed on a case by case basis in respect of each specific undertaking. therefore , undertakings presumed not to have minimal substance for tax purposes should be entitled to prove the contrary , including to prove that they do not serve primarily tax objectives , and rebut such presumption. after fulfilling their reporting obligations under this directive , they should provide additional information to the administration of the member state where they reside for tax purposes. while they may provide any additional information that they deem appropriate , it is essential to set common requirements of what may constitute appropriate additional evidence and should thus be required in all cases. where the member state , based on such additional evidence , considers that an undertaking has rebutted a presumption of lack of substance in a satisfactory manner , it should be able to issue a decision to certify that the undertaking has minimal substance for tax purposes in accordance with this directive. such decision may remain valid for the period during which factual and legal circumstances of the undertaking remain unchanged and up to 6 years from the time the decision is issued. this will allow to limit the resources allocated to cases that have been evidenced not to be a shell for the purposes of the directive. ### (10) it is natural to consider that whether an undertaking is actually performing economic activities relevant for tax purposes or serves mainly tax avoidance or evasion purposes , but such evaluation is ultimately a matter of facts and circumstances. this should be assessed on a case by case basis in respect of each specific undertaking. therefore , undertakings presumed not to have minimal substance for tax purposes should be entitled to prove the contrary , including to prove that they do not serve primarily tax objectives , and rebut such presumption. after fulfilling their reporting obligations under this directive , they should provide the necessary information to the administration of the member state where they reside for tax purposes , in accordance with the national legal tax framework. while they may provide any additional information that they deem appropriate , it is essential to set common requirements of what may constitute appropriate additional evidence and should thus be required in all cases. where the member state , based on such additional evidence , considers that an undertaking has rebutted a presumption of lack of substance in a satisfactory manner , it should be able to issue a decision to certify that the undertaking has minimal substance for tax purposes in accordance with this directive. such decision may remain valid for the period during which factual and legal circumstances of the undertaking remain unchanged and up to 6 years from the time the decision is issued. this will allow to limit the resources allocated to cases that have been evidenced not to be a shell for the purposes of the directive.


### (11) as the objective of this directive is to prevent tax avoidance and evasion that are likely to flourish through actions by undertakings without minimal substance , and in order to ensure tax certainty and enhance the proper functioning of the internal market , it is paramount to provide for a possibility of exemptions for undertakings which meet the gateway criterion but yet whose interposition has no actual advantageous impact on the overall tax position of the undertaking’s group or of the beneficial owner(s). for that reason , such undertakings should be entitled to request the administration of the member state , where they reside for tax purposes , to issue a decision which exempts them from complying with the proposed rules altogether and upfront. such exemption should also be limited in time , to allow the administration to verify on a regular basis that the factual and legal circumstances justifying the exemption decision remain valid. at the same time a potential extended duration of such decision will allow to limit the resources allocated to cases that should be exempt from the scope of the directive. ### (11) as the objective of this directive is to prevent tax avoidance and evasion through actions by undertakings without minimal substance , and in order to ensure tax certainty and enhance the proper functioning of the internal market , it is paramount to provide for a possibility of exemptions for undertakings which meet the gateway criterion but yet whose interposition has no actual advantageous impact on the overall tax position of the undertaking’s group or of the beneficial owner(s). for that reason , such undertakings should be entitled to request the administration of the member state where they reside for tax purposes to issue a decision which exempts them from complying with the proposed rules altogether and upfront. such exemption should also be limited in time , to allow the administration to verify on a regular basis that the factual and legal circumstances justifying the exemption decision remain valid. at the same time a potential extended duration of such decision will allow to limit the resources allocated to cases that should be exempt from the scope of the directive.


### (11) as the objective of this directive is to prevent tax avoidance and evasion that are likely to flourish through actions by undertakings without minimal substance , and in order to ensure tax certainty and enhance the proper functioning of the internal market , it is paramount to provide for a possibility of exemptions for undertakings which meet the gateway criterion but yet whose interposition has no actual advantageous impact on the overall tax position of the undertaking’s group or of the beneficial owner(s). for that reason , such undertakings should be entitled to request the administration of the member state , where they reside for tax purposes , to issue a decision which exempts them from complying with the proposed rules altogether and upfront. such exemption should also be limited in time , to allow the administration to verify on a regular basis that the factual and legal circumstances justifying the exemption decision remain valid. at the same time a potential extended duration of such decision will allow to limit the resources allocated to cases that should be exempt from the scope of the directive. ### (11) as the objective of this directive is to prevent tax avoidance and evasion that are likely to flourish through actions by undertakings without minimal substance , and in order to ensure tax certainty and enhance the proper functioning of the internal market , it is paramount to provide for a possibility of exemptions for undertakings which meet the gateway criterion but yet whose interposition has no actual advantageous impact on the overall tax position of the undertaking’s group or of the beneficial owner(s). for that reason , such undertakings should be entitled to request the administration of the member state , where they reside for tax purposes , to issue a decision which exempts them from complying with the proposed rules altogether and upfront. such exemption should also be limited in time , to allow the administration to verify on a regular basis that the factual and legal circumstances justifying the exemption decision remain valid. at the same time a potential extended duration of such decision will allow to limit the resources allocated to cases that should be exempt from the scope of the directive. a member state administration may decide to award the exemption without requiring the undertaking to perform the substance test provided that it is sufficiently confident that the award of said exemption is justified.


### (16) in order to improve effectiveness , member states should lay down penalties against the violation of the national rules that transpose this directive. such penalties should be effective , proportionate and dissuasive. to ensure tax certainty and a minimum level of coordination across all member states , it is necessary to fix a minimum monetary penalty , also taking into account the situation of each specific undertaking. the envisaged rules rely on self-assessment by the undertakings as regards whether or not they meet the gateway criteria. to achieve effectiveness of the provisions , incentivising adequate compliance across the union , and taking into account that a shell undertaking in one member state may be used to erode the tax base of another member state , it is important that any member state has the right to request another member state to conduct tax audits of undertakings at risk for not fulfilling minimum substance as defined in this directive. accordingly , to reinforce effectiveness , it is essential that the requested member state has an obligation to carry out such audit and to share information on the outcome , even where there is no finding of ‘shell’ entity. ### (16) in order to improve effectiveness , member states should lay down penalties against the violation of the national rules that transpose this directive. such penalties should be effective , proportionate and dissuasive. to ensure tax certainty and a minimum level of coordination across all member states , it is necessary to fix a minimum monetary penalty , also taking into account the situation of each specific undertaking. the envisaged rules rely on self-assessment by the undertakings as regards whether or not they meet the gateway criteria. to achieve effectiveness of the provisions , incentivising adequate compliance across the union , and taking into account that a shell undertaking in one member state may be used to erode the tax base of another member state , it is important that any member state has the right to request another member state to conduct tax audits of undertakings at risk for not fulfilling minimum substance as defined in this directive. accordingly , to reinforce effectiveness , it is essential that the requested member state has an obligation to carry out such audit and to share information on the outcome , even where there is no finding of ‘shell’ entity. joint audits pool expertise allow for a more thorough examination determination of the case at hand and contribute to a higher acceptance and ownership of the audit results. council directive (eu) 2021/514 established the framework for effective joint audits. member states should make use of the option of joint audits , where appropriate.


### (17) as the proper implementation and enforcement of the proposed rules in each member state is critical for the protection of other member states’ tax base , such implementation and enforcement should be monitored by the commission. member states should therefore communicate to the commission on a regular basis , specific information , including statistics , on the implementation and enforcement in their territory of national measures adopted pursuant to this directive. ### (17) as the proper implementation and enforcement of the proposed rules in each member state is critical for the protection of other member states’ tax base , such implementation and enforcement should be monitored by the commission. member states should therefore communicate to the commission on a regular basis , specific information , including statistics , on the implementation and enforcement in their territory of national measures adopted pursuant to this directive. this exchange of information must be performed with high standards of data protection.


### 1. member states shall require that undertakings meeting the following criteria to report to the competent authorities of member states in accordance with article 7: ### 1. member states shall require that undertakings meeting the following cumulative criteria to report to the competent authorities of member states in accordance with article 7:


### more than 75% of the revenues accruing to the undertaking in the preceding two tax years is relevant income; ### more than 75% of the revenues accruing to the undertaking in the preceding two tax years is relevant income , in accordance with article 4 as from the entry into force of this directive;


### more than 60% of the book value of the undertaking’s assets that fall within the scope of article 4 , points (e) and (f) , was located outside the member state of the undertaking in the preceding two tax years; ### more than 55% of the book value of the undertaking’s assets that fall within the scope of article 4 , points (e) and (f) , was located outside the member state of the undertaking in the preceding two tax years as from the entry into force of this directive;


### (ii) at least 60% of the undertaking’s relevant income is earned or paid out via cross-border transactions; ### (ii) at least 65% of the undertaking’s relevant income is earned via cross-border transactions;


### in the preceding two tax years , the undertaking outsourced the administration of day-to-day operations and the decision-making on significant functions. ### in the preceding two tax years , the undertaking outsourced the administration of day-to-day operations and the decision-making on significant functions to an undertaking outside its own jurisdiction.


### undertakings with holding activities that are resident for tax purposes in the same member state as the undertaking’s shareholder(s) or the ultimate parent entity , as defined in section i , point 7 , of annex iii to directive 2011/16/eu; ### undertakings with holding activities that are resident for tax purposes in the same member state as the majority of the undertaking’s shareholder(s) or the ultimate parent entity , as defined in section i , point 7 , of annex iii to directive 2011/16/eu;


### undertakings with at least five own full-time equivalent employees or members of staff exclusively carrying out the activities generating the relevant income; ### undertakings with at least three full-time equivalent employees or members of staff carrying out the activities generating the relevant income or day-to-day activities of the undertaking;


### 1. member states shall require that undertakings meeting the criteria laid down in article 6(1) declare in their annual tax return , for each tax year , whether they meet the following indicators of minimum substance: ### 1. member states shall require that undertakings meeting the criteria laid down in article 6(1) declare in their annual tax return , for each tax year , if they do not meet the following indicators of minimum substance:


### the undertaking has own premises in the member state , or premises for its exclusive use; ### the undertaking has own premises in the member state , premises for its exclusive use or premises shared with entities of the same group;


### the undertaking has at least one own and active bank account in the union; ### the undertaking has at least one own bank account in the union through which the relevant income is received;


### (2) are qualified and authorised to take decisions in relation to the activities that generate relevant income for the undertaking or in relation to the undertaking’s assets; ### (2) are authorised to take decisions in relation to the activities that generate relevant income for the undertaking or in relation to the undertaking’s assets;


### (4) are not employees of an enterprise that is not an associated enterprise and do not perform the function of director or equivalent of other enterprises that are not associated enterprises; ### deleted


### (ii) the majority of the full-time equivalent employees of the undertaking are resident for tax purposes in the member state of the undertaking , or at no greater distance from that member states insofar as such distance is compatible with the proper performance of their duties , and such employees are qualified to carry out the activities that generate relevant income for the undertaking. ### (ii) more than 33% of the full-time equivalent employees of the undertaking are resident for tax purposes in the member state of the undertaking , or at no greater distance from that member states insofar as such distance is compatible with the proper performance of their duties , and such employees are entitled to carry out the activities that generate relevant income for the undertaking.


### 1. member states shall take the appropriate measures to allow undertakings that are presumed not to have minimum substance under article 8(2) to rebut this presumption by providing any additional supporting evidence of the business activities which they perform to generate relevant income. ### 1. member states shall take the necessary measures to allow undertakings that are presumed not to have minimum substance under article 8(2) to rebut this presumption , without undue delay and excessive administrative costs , by providing any additional supporting evidence of the business activities which they perform to generate relevant income.


### a document allowing to ascertain the commercial rationale behind the establishment of the undertaking; ### a document allowing to ascertain the business rationale behind the establishment of the undertaking;


### a document allowing to ascertain the commercial rationale behind the establishment of the undertaking; ### a document allowing to ascertain the commercial rationale behind the establishment of the undertaking in the member state where the activity is performed; or


### information about the employee profiles , including the level of their experience , their decision-making power in the overall organisation , role and position in the organisation chart , the type of their employment contract , their qualifications and duration of employment; ### information about the employee profiles , namely the level of their experience , their decision-making power in the overall organisation , role and position in the organisation chart , the type of their employment contract , their qualifications and duration of employment , safeguarding high levels of data protection and privacy; or


### 1. a member state shall take the appropriate measures to allow an undertaking that meets the criteria laid down in article 6(1) to request an exemption from its obligations under this directive if the existence of the undertaking does not reduce the tax liability of its beneficial owner(s) or of the group , as a whole , of which the undertaking is a member. ### 1. a member state shall take the necessary measures to allow an undertaking that meets the criteria laid down in article 6(1) to request , without undue delay and excessive administrative costs , an exemption from its obligations under this directive if the existence of the undertaking does not reduce the tax liability of its beneficial owner(s) or of the group , as a whole , of which the undertaking is a member.


### the vat number , where available , of the undertaking required to report pursuant to article 6 of directive [op]; ### deleted


### 9. information processed shall be retained for 5 years and in any case no longer than necessary to achieve the purposes of this directive. ### deleted


### member states shall ensure that those penalties include an administrative pecuniary sanction of at least 5% of the undertaking’s turnover in the relevant tax year , if the undertaking that is required to report pursuant to article 6 does not comply with such requirement for a tax year within the prescribed deadline or makes a false declaration in the tax return under article 7. ### member states shall ensure that those penalties include an administrative pecuniary sanction of at least 2 ,5% of the undertaking’s revenue in the relevant tax year , if the undertaking that is required to report pursuant to article 6 does not comply with such requirement for a tax year within the prescribed deadline or makes a false declaration in the tax return under article 7.


### request for tax audits ### request for joint tax audits


### where the competent authority of one member state has reason to believe that an undertaking which is resident for tax purposes in another member state has not met its obligations under this directive , the former member state may request the competent authority of the latter to conduct a tax audit of the undertaking. ### where the competent authority of one member state has reason to believe that an undertaking which is resident for tax purposes in another member state has not met its obligations under this directive , the former member state may request the competent authority of the latter to conduct a joint tax audit of the undertaking following the procedures laid out in article 12a of council directive (eu) 2021/514 of 22 march 2021 amending directive 2011/16/eu on administrative cooperation in the field of taxation.


### where the competent authority of one member state has reason to believe that an undertaking which is resident for tax purposes in another member state has not met its obligations under this directive , the former member state may request the competent authority of the latter to conduct a tax audit of the undertaking. ### where the competent authority of one member state has reason to believe that an undertaking which is resident for tax purposes in another member state has not met its obligations under this directive , the former member state may , upon detailing of such reasons , request the competent authority of the latter to conduct a tax audit of the undertaking.


### the competent authority of the requested member state shall initiate it within one month from the date of receipt of the request and conduct the tax audit , in accordance with the rules governing tax audits in the requested member state. ### where the competent authority of the requesting member state cannot request a joint tax audit due to legal considerations , the competent authority of the requested member state shall initiate a national audit within one month from the date of receipt of the request and conduct the tax audit , in accordance with the rules governing tax audits in the requested member state.


### number of audits to undertakings that meet the conditions laid down in article 6(1) , ### number of audits to undertakings that meet the conditions laid down in article 6(1) , broken down into joint audits and regular audits ,


### 1. by 31 december 2028 , the commission shall present a report to the european parliament and the council on the implementation of this directive. ### 1. by 31 december 2028 , the commission shall present a report to the european parliament and the council on the implementation of this directive. if appropriate , the report shall be accompanied by a legislative proposal amending this directive.


### 1. member states shall adopt and publish , by [30 june 2023] at the latest , the laws , regulations and administrative provisions necessary to comply with this directive. they shall forthwith communicate to the commission the text of those provisions. ### 1. member states shall adopt and publish , by [31 december 2023] at the latest , the laws , regulations and administrative provisions necessary to comply with this directive. they shall forthwith communicate to the commission the text of those provisions.


### they shall apply those provisions from [1 january 2024]. ### they shall apply those provisions from [1 january 2025].


### — having regard to the commission communication entitled ‘strategy for financing the transition to a sustainable economy’ of 6 july 2021(swd(2021)0180) , ### deleted


### a. whereas the banking union (bu) currently consists of the single supervisory mechanism (ssm) and the single resolution mechanism (srm); ### a. whereas the banking union (bu) , comprising the single supervisory mechanism (ssm) and the single resolution mechanism (srm) , with the single rulebook as its foundation , ensures full alignment between supervision and management of banking crisis and is an integral part of the union's financial stability;


### a. whereas the banking union (bu) currently consists of the single supervisory mechanism (ssm) and the single resolution mechanism (srm); ### a. whereas the banking union (bu) currently consists of the single supervisory mechanism (ssm) and the single resolution mechanism (srm) and a set of high minimum standards in the area of deposit protection;


### b. whereas the bu is open to all eu member states; ### b. whereas the bu is open to all eu member states; whereas bulgaria and croatia have joined erm ii and entered the banking union;


### c. whereas the problems of the banking sector may worsen after the temporary support measures introduced during the covid-19 crisis are lifted; ### c. whereas the temporary support measures introduced during the covid-19 crisis have served as a useful means to bolster the banking sector; whereas the measures were a good initial tool for tackling the crisis , but they must gradually give way to recovery support tools which enable reforms to be made to the european banking system that consolidate it and foster a strong exit from the economic crisis;


### c. whereas the problems of the banking sector may worsen after the temporary support measures introduced during the covid-19 crisis are lifted; ### c. whereas the banking sector faces emerging risks as we emerge from the pandemic , particularly in relation to asset quality deterioration and potential increases in npl ratios after the temporary support measures introduced during the covid-19 crisis are phased out;


### d. whereas some financial institutions in the bu are heavily invested in the debt of their own home sovereign; ### d. whereas the sovereign-bank nexus continues to exist and whereas many european banks have high exposure to domestic sovereign debt; whereas this problem is exacerbated by the zero risk weight assigned to sovereign exposures which incentivises over-investment in government bonds; whereas this sovereign-bank nexus could pose financial stability risks and therefore must be addressed through eu solutions to modify risk weights for sovereign exposures;


### d. whereas some financial institutions in the bu are heavily invested in the debt of their own home sovereign; ### d. whereas sovereign exposures by european banks have reached close to 12% of banks’ total assets1a; whereas some financial institutions in the bu are heavily invested in the debt of their own home sovereign;


### e. whereas the role of the banking sector is crucial to the recovery and transition to a low-carbon economy; ### e. whereas the role of the banking sector and of the financial markets sector as a whole is crucial to the recovery and transition to a low-carbon economy;


### f. whereas there are numerous challenges to the digitalisation of finance; ### f. whereas the digitalisation of finance has brought about important technological advances in the eu banking sector through increased efficiency in the provision of banking services and a greater appetite for innovation; whereas the digitalisation of finance also presents challenges to the eu banking sector due to cybersecurity risks , data privacy , reputational risks , aml risks and consumer protection concerns; whereas the digitalisation of finance will have a significant impact on face-to-face banking as well as the availability of banking services in rural areas;


### g. whereas there is a need for effective anti-money laundering supervision; ### g. whereas there is an urgent need for more effective eu anti-money laundering supervision; whereas there still exists major differences in approach taken to aml/cft supervision by national authorities and in the application of eu aml legislation;


### g. whereas there is a need for effective anti-money laundering supervision; ### g. whereas there is a need for effective anti-money laundering supervision that bolsters the european banking system and protects it from threats from third countries;


### h. whereas consumers , investors and all depositors should be well protected; ### h. whereas consumers , investors and all depositors should be well protected in the context of a well-functioning banking union and should be kept well informed of any decisions that impact them;


### h. whereas consumers , investors and all depositors should be well protected; ### h. whereas consumers , investors and all depositors should receive more harmonised and better protection and access in the member states;


### h. whereas consumers , investors and all depositors should be well protected; ### h. whereas consumers , investors and covered depositors should be well protected;


### i. whereas taxpayers should not bear the cost of remedial action when a bank fails; ### i. whereas one of the key objectives of banking union is that taxpayers should not bear the cost of remedial action when a bank fails;


### 1. recalls that one goal of the bu is the security of the banking system and the prevention of bank bailouts by taxpayers; supports efforts to strengthen the bu; stresses that a solid bu will result in increased confidence in the banking sector; ### 1. recalls that a key goal of the bu is the security of the banking system and the prevention of bank bailouts by taxpayers; recognises that through the establishment of the ssm and the srm , europe's banks are now in a stronger position to withstand financial shocks; notes , however , that the third pillar of the bu (edis) is still pending and therefore supports efforts to strengthen the bu; stresses that a solid bu will result in increased confidence in the banking sector and will ensure that eu banks are stronger and better supervised;


### 1. recalls that one goal of the bu is the security of the banking system and the prevention of bank bailouts by taxpayers; supports efforts to strengthen the bu; stresses that a solid bu will result in increased confidence in the banking sector; ### 1. recalls that one goal of the bu is the security of the banking system and the prevention of bank bailouts by taxpayers; supports efforts to strengthen the bu; stresses that a solid bu will result in increased confidence in the banking sector and increase its resilience and competitiveness;


### 2. considers that the bu should be built in a friendly and attractive way , including for member states outside the euro area; ### 2. considers that the bu should be built up in a coherent and robust way while providing opportunities and incentives for member states outside the euro area to join; recognises that participation in the banking union is inextricably linked to the respective eu standards and legislation; welcomes the entry of bulgaria and croatia into the banking union and the inclusion of the bulgarian lev and the croatian kuna in erm ii and welcomes the close cooperation established between the ecb and the bulgarian national bank and croatian national bank;


### 3. stresses that the relatively good performance of banks during the covid-19 crisis is related to the policies implemented by the member states during the pandemic , as well as to temporary measures under regulation (eu) 575/2013 (capital requirements regulation); ### 3. stresses that the relatively good performance of banks during the covid-19 crisis is related to the policies implemented by the member states during the pandemic , as well as to temporary measures under the capital requirements regulation (crr) 'quick fix' which supported banks’ lending capacity to households and businesses; considers that the bu has enabled european banks to weather this crisis in a resilient manner as the banking sector is better-capitalised and less-leveraged than a decade ago;


### 4. recalls the key role of the eu banking sector in financing the recovery of the european economy; ### 4. recalls the key role of the eu banking sector in financing the recovery of the european economy and considers that the recovery will also depend on banks having sufficient capital to provide credit , particularly as public support measures in member states are gradually removed;


### 4. recalls the key role of the eu banking sector in financing the recovery of the european economy; ### 4. recalls the key role of the eu banking sector and the capital markets union in financing the recovery of the european economy;


### 5. notes that the eba , the ecb and the srb still see many problems in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these problems are likely to increase after the withdrawal of the emergency measures; ### 5. notes that the eba , the ecb and the srb still see many problems in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these problems are likely to increase after the withdrawal of the emergency measures; therefore highlights the importance of prudent risk management and appropriate provisioning; invites the commission as well as national and european supervisory authorities to prepare for such a deterioration of asset quality;


### 5. notes that the eba , the ecb and the srb still see many problems in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these problems are likely to increase after the withdrawal of the emergency measures; ### 5. notes that the eba , the ecb and the srb still see many problems in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these problems are likely to increase after the withdrawal of the emergency measures; points out that the national picture in this area differs significantly from one member state to the next;


### 5. notes that the eba , the ecb and the srb still see many problems in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these problems are likely to increase after the withdrawal of the emergency measures; ### 5. notes that the eba , the ecb and the srb still see many problems in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); stresses that eu and national supervisors must monitor these risks closely as emergency public support measures are withdrawn;


### 6. supports ongoing work on the implementation of the basel iii rules; ### 6. supports the ongoing work on the implementation of the basel iii agreement and welcomes in this context the commission's legislative banking package of 27 october 2021; considers that in the implementation process , the union must ensure full compliance with basel standards while also taking into account the specificities and diversity of the european banking sector and ensuring that there is no significant increase in overall capital requirements;


### 6. supports ongoing work on the implementation of the basel iii rules; ### 6. supports ongoing work on the implementation of the basel iii rules; recalls the objective that the finalisation package must not significantly increase overall capital requirements; therefore commits itself to an implementation approach that duly takes into account european specificities;


### 7. notes that the banking sector is adapting to the challenges of digitalisation; stresses the need for further investments , research and adequate regulations; appreciates the work on the digital finance package; considers that the priority should be customer safety , inclusiveness and technological neutrality; observes with interest the work on the digital euro; ### 7. welcomes that the banking sector is adapting to the challenges and opportunities of digitalisation which will enable banks to better serve their customers; stresses the need for further investments in it systems , r&d and the development of a regulatory framework that is fit-for-purpose to respond to digitalisation trends and based on technological neutrality; welcomes the progress made on the digital finance package; considers that consumer protection must be strengthened in a digital context and that financial inclusion should be prioritised , particularly through improved digital and financial literacy; stresses that there is a need for banks to preserve extensive face-to-face banking services , particularly in rural areas; observes with interest the work on the digital euro;


### 7. notes that the banking sector is adapting to the challenges of digitalisation; stresses the need for further investments , research and adequate regulations; appreciates the work on the digital finance package; considers that the priority should be customer safety , inclusiveness and technological neutrality; observes with interest the work on the digital euro; ### 7. notes that the banking sector is adapting to the challenges of digitalisation; stresses the need for further investments , research and proportionate regulations; appreciates the work on the digital finance package; considers that the priority should be customer safety , inclusiveness , financial stability and integrity and technological neutrality; observes with interest the work on the digital euro;


### 9. notes that there is a prospect of gradually phasing out emergency measures and returning to pre-covid-19 capital requirements; ### 9. notes that there is a prospect of gradually phasing out emergency public support measures in a coordinated and coherent way; considers that throughout this process the ability of banks to bear risks and provide financing will be critical since many highly indebted firms will need to deleverage and boost equity; stresses that the european banking sector will need to provision appropriately for impaired loans and cautions against a sudden release of pandemic-related loan loss provisions;


### 10. considers the reduction of npls should remain a priority; warns that their number is likely to increase rapidly after the withdrawal of emergency support measures; draws attention to the importance of prudential compliance , early identification and proactive management of npls; ### 10. considers the reduction of npls should remain a priority; warns that the removal of emergency public support measures increases the risk of a further build-up of npls; however , welcomes that the aggregate non-performing loans (npl) ratio in the euro area decreased further to 2.17% in the third quarter of 2021 , the lowest level recorded since supervisory banking statistics were first published in the second quarter of 2015; notes the ecb's financial stability review of 17 november 2021 which states that the full impact of the pandemic on bank asset quality could take another two years to become visible; draws attention to the importance of prudential compliance , early identification and proactive management of npls;


### 10. considers the reduction of npls should remain a priority; warns that their number is likely to increase rapidly after the withdrawal of emergency support measures; draws attention to the importance of prudential compliance , early identification and proactive management of npls; ### 10. considers the reduction of npls should remain a high priority; warns that their number is likely to increase rapidly after the withdrawal of emergency support measures; draws attention to the importance of prudential compliance , early identification and proactive management of npls as well as adequate provisioning;


### 11. is concerned about the rising level of sovereign debt on the balance sheets of banks in the bu; notes that government bonds are not risk-free assets and that risks are differentiated; emphasises that the issue of regulatory treatment of sovereign exposures requires an in-depth examination of the consequences of different approaches; ### 11. is concerned about the rising level of sovereign debt on the balance sheets of banks in the bu; notes that government bonds are not risk-free assets and that risks are differentiated; emphasises that the issue of regulatory treatment of sovereign exposures should be addressed through modification of risk weights for sovereign exposures;


### 11. is concerned about the rising level of sovereign debt on the balance sheets of banks in the bu; notes that government bonds are not risk-free assets and that risks are differentiated; emphasises that the issue of regulatory treatment of sovereign exposures requires an in-depth examination of the consequences of different approaches; ### 11. is concerned about the rising level of sovereign debt on the balance sheets of banks in the bu; notes that government bonds are not risk-free assets , but are incorrectly treated as such , and that risks are differentiated; emphasises that the issue of regulatory treatment of sovereign exposures should be addressed urgently;


### 12. notes that the transition to a low-carbon economy presents new challenges and risks related to the preference for sustainable investments; stresses the need for an in-depth analysis of the economic efficiency of sustainable investments in order to avoid a future bubble of green assets; calls for clear guidelines for banks based on economic data; ### 12. notes that the transition to a low-carbon economy presents new challenges and risks and requires significant sustainable investments from the public and private sector; calls for clear guidelines for banks based on economic data and welcomes the efforts of the ssm to provide guidance and clarity to banks for self-assessment and the appropriate reporting of environmental and climate change-related risks;


### 12. notes that the transition to a low-carbon economy presents new challenges and risks related to the preference for sustainable investments; stresses the need for an in-depth analysis of the economic efficiency of sustainable investments in order to avoid a future bubble of green assets; calls for clear guidelines for banks based on economic data; ### 12. notes that the transition to a low-carbon economy presents new challenges and risks related to the preference for sustainable investments; stresses the need for an in-depth analysis of the economic efficiency of sustainable investments in order to avoid the build-up of a future bubble of green assets; calls for clear guidelines for banks based on economic data;


### 14. draws attention to the dangers of a very loose monetary policy stimulating inflation; points out the need for the gradual tightening of monetary policy; ### deleted


### 14. draws attention to the dangers of a very loose monetary policy stimulating inflation; points out the need for the gradual tightening of monetary policy; ### 14. draws attention to the dangers of a very loose monetary policy stimulating inflation; notes that the ultra-accommodative monetary policy combined with negative deposit rates decreases the profitability and competitiveness of european banks; points out the need for the gradual tightening of monetary policy;


### 14. draws attention to the dangers of a very loose monetary policy stimulating inflation; points out the need for the gradual tightening of monetary policy; ### 14. draws attention to the dangers of a monetary policy that might stimulate inflation; points out the need for the gradual tightening of monetary policy in a gradual process that takes account of the exceptional circumstances of the pandemic and of economic recovery;


### 14. draws attention to the dangers of a very loose monetary policy stimulating inflation; points out the need for the gradual tightening of monetary policy; ### 14. expresses its concern about the dangers of a very loose monetary policy stimulating inflation; points out the need for the gradual tightening of monetary policy and the re-establishment of public deficit controls as a priority;


### 15. indicates that the trend towards consolidation in the banking sector is likely to increase as a result of the pandemic; recognises the challenges posed to banking supervision by large systemically important institutions , whose possible problems may affect financial stability in many jurisdictions; ### 15. notes the trend towards increased consolidation in the banking sector in europe in recent years; notes that european banking merger and acquisition activity in 2021 is on track to outpace both 2020 and 2019 levels due to a range of factors , including cost pressures , low interest rates and digitalisation1a; recognises the challenges posed to banking supervision , particularly in the context of resolvability , but also notes the possible benefits of banking consolidation including addressing low profitability , overcapacities and fragmentation of the banking sector; welcomes the ecb's guide on the supervisory approach to consolidation in the banking sector which outlines supervisory expectations regarding consolidation projects2a ;


### 16. notes the problems and challenges related to home/host issues; points out that greater market integration requires credible safeguards in eu law for host member states; ### 16. notes that home-host issues remain a challenge for the completion of bu; calls for greater market integration , which involves better co-ordination between home and host bank supervisors and requires credible safeguards for host member states;


### 17. stresses the need for effective anti-money laundering supervision; notes the commission’s adoption of the anti-money laundering (aml) package of proposals; ### 17. stresses the need for more effective anti-money laundering supervision and harmonisation since the existing framework still suffers from several shortcomings and uneven national transposition; stresses that banks act as gatekeepers in the fight against money laundering and therefore must have in place robust risk management frameworks and be supervised effectively; welcomes the commission’s anti-money laundering (aml) package of proposals of 20 july 2021 and calls for a swift agreement of all proposals; welcomes in particular the proposal for a new anti-money laundering authority (amla) which will supervise the enforcement of aml/cft rules by member states; stresses that for amla to be truly effective , it must be resourced efficiently;


### 17. stresses the need for effective anti-money laundering supervision; notes the commission’s adoption of the anti-money laundering (aml) package of proposals; ### 17. stresses the need for effective anti-money laundering supervision that bolsters the european banking system and makes it more competitive vis-a-vis third jurisdictions; notes the commission’s adoption of the anti-money laundering (aml) package of proposals; welcomes the proposal to establish an anti-money laundering authority (amla) , which will be key to quickly and effectively tackling any threats of attack on our european banking systems;


### 18. underlines the need to protect consumers from abuses and harmful practices; ### 18. underlines the need to protect consumers from abuses and harmful practices and therefore calls on the commission to ensure that all eu legislation on banking supervision is upheld and urges the member states to adopt and implement eu legislation properly;


### 18. underlines the need to protect consumers from abuses and harmful practices; ### 18. underlines the importance of strengthening consumer and investor protection; notes that despite strong eu consumer protection rules , national rules implementing european consumer protection requirements vary across the banking union , pointing to the need for harmonisation;