1990L0434 — EN — 01.05.2004 — 002.001 — 1
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►B COUNCIL DIRECTIVE
of 23 July 1990
on the common system of taxation applicable to mergers, divisions, transfers of assets and
exchanges of shares concerning companies of different Member States
(90/434/EEC)
(OJ L 225, 20.8.1990, p. 1)
Amended by:
Official Journal
No page date
►A1 Act of Accession of Austria, Sweden and Finland C 241 21 29.8.1994
(adapted by Council Decision 95/1/EC, Euratom, ECSC) L 1 1 1.1.1995
►A2 Act concerning the conditions of accession of the Czech Republic, the
Republic of Estonia, the Republic of Cyprus, the Republic of Latvia,
the Republic of Lithuania, the Republic of Hungary, the Republic of
Malta, the Republic of Poland, the Republic of Slovenia and the SlovakRepublic and the adjustments to the Treaties on which the EuropeanUnion is foundedL 236 33 23.9.2003
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COUNCIL DIRECTIVE
of 23 July 1990
on the common system of taxation applicable to mergers, divisions,
transfers of assets and exchanges of shares concerning companies
of different Member States
(90/434/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 100 thereof,
Having regard to the proposal of the Commission (1),
Having regard to the opinion of the European Parliament (2),
Having regard to the opinion of the Economic and Social
Committee (3),
Whereas mergers, divisions, transfers of assets and exchanges of shares
concerning companies of different Member States may be necessary inorder to create within the Community conditions analogous to those ofan internal market and in order thus to ensure the establishment andeffective functioning of the common market; whereas such operationsought not to be hampered by restrictions, disadvantages or distortions
arising in particular from the tax provisions of the Member States;
whereas to that end it is necessary to introduce with respect to suchoperations tax rules which are neutral from the point of view of compe-tition, in order to allow enterprises to adapt to the requirements of thecommon market, to increase their productivity and to improve their
competitive strength at the international level;
Whereas tax provisions disadvantage such operations, in comparison
with those concerning companies of the same Member State; whereasit is necessary to remove such disadvantages;
Whereas it is not possible to attain this objective by an extension at the
Community level of the systems presently in force in the Member
States, since differences between these systems tend to produce distor-
tions; whereas only a common tax system is able to provide asatisfactory solution in this respect;
Whereas the common tax system ought to avoid the imposition of tax
in connection with mergers, divisions, transfers of assets or exchanges
of shares, while at the same time safeguarding the financial interests of
the State of the transferring or acquired company;
Whereas in respect of mergers, divisions or transfers of assets, such
operations normally result either in the transformation of the transfer-ring company into a permanent establishment of the companyreceiving the assets or in the assets becoming connected with a perma-
nent establishment of the latter company;
Whereas the system of deferral of the taxation of the capital gains
relating to the assets transferred until their actual disposal, applied tosuch of those assets as are transferred to that permanent establishment,permits exemption from taxation of the corresponding capital gains,
while at the same time ensuring their ultimate taxation by the State of
the transferring company at the date of their disposal;
Whereas it is also necessary to define the tax regime applicable to
certain provisions, reserves or losses of the transferring company andto solve the tax problems occurring where one of the two companieshas a holding in the capital of the other;1990L0434 — EN — 01.05.2004 — 002.001 — 2
(1) OJ No C 39, 22. 3. 1969, p. 1.
(2) OJ No C 51, 29. 4. 1970, p. 12.
(3) OJ No C 100, 1. 8. 1969, p. 4.
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Whereas the allotment to the shareholders of the transferring company
of securities of the receiving or acquiring company would not in itselfgive rise to any taxation in the hands of such shareholders;
Whereas it is necessary to allow Member States the possibility of
refusing to apply this Directive where the merger, division, transfer ofassets or exchange of shares operation has as its objective tax evasion
or avoidance or results in a company, whether or not it participates in
the operation, no longer fulfilling the conditions required for the repre-sentation of employees in company organs,
HAS ADOPTED THIS DIRECTIVE:
TITLE I
General provisions
Article 1
Each Member State shall apply this Directive to mergers, divisions,
transfers of assets and exchanges of shares in which companies fromtwo or more Member States are involved.
Article 2
For the purposes of this Directive:
(a) ‘merger’ shall mean an operation whereby:
— one or more companies, on being dissolved without going into
liquidation, transfer all their assets and liabilities to anotherexisting company in exchange for the issue to their shareholders
of securities respresenting the capital of that other company,
and, if applicable, a cash payment not exceeding 10 % of thenominal value, or, in the absence of a nominal value, of theaccounting par value of those securities,
— two or more companies, on being dissolved without going into
liquidation, transfer all their assets and liabilities to a companythat they form, in exchange for the issue to their shareholders ofsecurities representing the capital of that new company, and, ifapplicable, a cash payment not exceeding 10 % of the nominalvalue, or in the absence of a nominal value, of the accounting
par value of those securities,
— a company, on being dissolved without going into liquidation,
transfers all its assets and liabilities to the company holding allthe securities representing its capital;
(b) ‘division’ shall mean an operation whereby a company, on being
dissolved without going into liquidation, transfers all its assets and
liabilities to two or more existing or new companies, in exchangefor the pro rata issue to its shareholders of securities representingthe capital of the companies receiving the assets and liabilities,and, if applicable, a cash payment not exceeding 10 % of thenominal value or, in the absence of a nominal value, of the
accounting par value of those securities;
(c) ‘transfer of assets’ shall mean an operation whereby a company
transfers without being dissolved all or one or more branches ofits activity to another company in exchange for the transfer of secu-rities representing the capital of the company receiving the transfer;
(d) ‘exchange of shares’ shall mean an operation whereby a company
acquires a holding in the capital of another company such that it
obtains a majority of the voting rights in that company in exchange
for the issue to the shareholders of the latter company, in exchangefor their securities, of securities representing the capital of theformer company, and, if applicable, a cash payment not exceeding10 % of the nominal value or, in the absence of a nominal value, ofthe accounting par value of the securities issued in exchange;1990L0434 — EN — 01.05.2004 — 002.001 — 3
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(e) ‘transferring company’ shall mean the company transferring its
assets and liabilities or transferring all or one or more branches ofits activity;
(f) ‘receiving company’ shall mean the company receiving the assets
and liabilities or all or one or more branches of the activity of the
transferring company;
(g) ‘acquired company’ shall mean the company in which a holding is
acquired by another company by means of an exchange of securi-ties;
(h) ‘acquiring company’ shall mean the company which acquires a
holding by means of an exchange of securities;
(i) ‘branch of activity’ shall mean all the assets and liabilities of a
division of a company which from an organizational point of view
constitute an independent business, that is to say an entity capable
of functioning by its own means.
Article 3
For the purposes of this Directive, ‘company from a Member State’
shall mean any company which:
(a) takes one of the forms listed in the Annex hereto;
(b) according to the tax laws of a Member State is considered to be
resident in that State for tax purposes and, under the terms of adouble taxation agreement concluded with a third State, is notconsidered to be resident for tax purposes outside the Community;
(c) moreover, is subject to one of the following taxes, without the
possibility of an option or of being exempt:
— impôt des sociétés/vennootschapsbelasting in Belgium,
— selskabsskat in Denmark,
— Körperschaftsteuer in the Federal Republic of Germany,—φόρος εισοδήµατος νοµικών προσώπων κερδοσκοπικού
χαρακτήρα, in Greece,
— impuesto sobre sociedades in Spain,
— impôt sur les sociétés in France,— corporation tax in Ireland,
— imposta sul reddito delle persone giuridiche in Italy,
— impôt sur le revenu des collectivités in Luxembourg,— vennootschapsbelasting in the Netherlands,
— imposto sobre o rendimento das pessoas colectivas in Portugal,
— corporation tax in the United Kingdom,
— Körperschaftsteuer in Austria,
— yhteisöjen tulovero/inkomstskatten för samfund in Finland,
— statlig inkomstskatt in Sweden,
—D a ňzpříjmůprávnických osobin the Czech Republic,
— Tulumaks in Estonia,
—Φόρος Εισοδήµατος in Cyprus,
—u z ņēmumu ien ākuma nodoklis in Latvia,
— Pelno mokestis in Lithuania,
— Társasági adó in Hungary,
— Taxxa fuq l-income in Malta,
— Podatek dochodowy od osób prawnych in Poland,
— Davek od dobi čka pravnih oseb in Slovenia,
—D a ňz príjmov právnických osôb in Slovakia,
or to any other tax which may be substituted for any of the above
taxes.1990L0434 — EN — 01.05.2004 — 002.001 — 4
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TITLE II
Rules applicable to mergers, divisions and exchanges of shares
Article 4
1. A merger or division shall not give rise to any taxation of capital
gains calculated by reference to the difference between the real values
of the assets and liabilities transferred and their values for tax purposes.
The following expressions shall have the meanings assigned to them:
— value for tax purposes: the value on the basis of which any gain or
loss would have been computed for the purposes of tax upon theincome, profits or capital gains of the transferring company if such
assets or liabilities had been sold at the time of the merger or divi-
sion but independently of it,
— transferred assets and liabilities: those assets and liabilities of the
transferring company which, in consequence of the merger or divi-
sion, are effectively connected with a permanent establishment of
the receiving company in the Member State of the transferringcompany and play a part in generating the profits or losses takeninto account for tax purposes.
2. The Member States shall make the application of paragraph 1
conditional upon the receiving company's computing any new deprecia-tion and any gains or losses in respect of the assets and liabilitiestransferred according to the rules that would have applied to the trans-
ferring company or companies if the merger or division had not taken
place.
3. Where, under the laws of the Member State of the transferring
company, the receiving company is entitled to have any new deprecia-tion or any gains or losses in respect of the assets and liabilitiestransferred computed on a basis different from that set out in paragraph2, paragraph 1 shall not apply to the assets and liabilities in respect ofwhich that option is exercised.
Article 5
The Member States shall take the necessary measures to ensure that,
where provisions or reserves properly constituted by the transferringcompany are partly or wholly exempt from tax and are not derivedfrom permanent establishments abroad, such provisions or reservesmay be carried over, with the same tax exemption, by the permanent
establishments of the receiving company which are situated in the
Member State of the transferring company, the receiving companythereby assuming the rights and obligations of the transferringcompany.
Article 6
To the extent that, if the operations referred to in Article 1 were
effected between companies from the Member State of the transferringcompany, the Member State would apply provisions allowing thereceiving company to take over the losses of the transferring companywhich had not yet been exhausted for tax purposes, it shall extendthose provisions to cover the take-over of such losses by the receiving
company's permanent establishments situated within its territory.
Article 7
1. Where the receiving company has a holding in the capital of the
transferring company, any gains accruing to the receiving company onthe cancellation of its holding shall not be liable to any taxation.
2. The Member States may derogate from paragraph 1 where the
receiving company's holding in the capital of the transferring companydoes not exceed 25 %.1990L0434 — EN — 01.05.2004 — 002.001 — 5
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Article 8
1. On a merger, division or exchange of shares, the allotment of
securities representing the capital of the receiving or acquiringcompany to a shareholder of the transferring or acquired company inexchange for securities representing the capital of the latter companyshall not, of itself, give rise to any taxation of the income, profits or
capital gains of that shareholder.
2. The Member States shall make the application of paragraph 1
conditional upon the shareholder's not attributing to the securitiesreceived a value for tax purposes higher than the securities exchanged
had immediately before the merger, division or exchange.
The application of paragraph 1 shall not prevent the Member States
from taxing the gain arising out of the subsequent transfer of securitiesreceived in the same way as the gain arising out of the transfer of secu-
rities existing before the acquisition.
In this paragraph the expression ‘value for tax purposes’ means the
amount on the basis of which any gain or loss would be computed forthe purposes of tax upon the income, profits or capital gains of a share-
holder of the company.
3. Where, under the law of the Member State in which he is resi-
dent, a shareholder may opt for tax treatment different from that setout in paragraph 2, paragraph 1 shall not apply to the securities in
respect of which such an option is exercised.
4. Paragraphs 1, 2 and 3 shall not prevent a Member State from
taking into account when taxing shareholders any cash payment thatmay be made on the merger, division or exchange.
TITLE III
Rules applicable to transfers of assets.
Article 9
The provisions of Articles 4, 5 and 6 shall apply to transfers of assets.
TITLE IV
Special case of the transfer of a permanent establishment
Article 10
1. Where the assets transferred in a merger, a division or a transfer
of assets include a permanent establishment of the transferring
company which is situated in a Member State other than that of thetransferring company, the latter State shall renounce any right to taxthat permanent establishment. However, the State of the transferringcompany may reinstate in the taxable profits of that company suchlosses of the permanent establishment as may previously have been
set off against the taxable profits of the company in that State and
which have not been recovered. The State in which the permanentestablishment is situated and the State of the receiving company shallapply the provisions of this Directive to such a transfer as if the formerState were the State of the transferring company.
2. By way of derogation from paragraph 1, where the Member State
of the transferring company applies a system of taxing world-wideprofits, that Member State shall have the right to tax any profits orcapital gains of the permanent establishment resulting from the merger,
division or transfer of assets, on condition that it gives relief for the tax
that, but for the provisions of this Directive, would have been chargedon those profits or capital gains in the Member State in which thatpermanent establishment is situated, in the same way and in the sameamount as it would have done if that tax had actually been charged andpaid.1990L0434 — EN — 01.05.2004 — 002.001 — 6
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TITLE V
Final provisions
Article 11
1. A Member State may refuse to apply or withdraw the benefit of
all or any part of the provisions of Titles II, III and IV where it appearsthat the merger, division, transfer of assets or exchange of shares:
(a) has as its principal objective or as one of its principal objectives
tax evasion or tax avoidance; the fact that one of the operations
referred to in Article 1 is not carried out for valid commercialreasons such as the restructuring or rationalization of the activitiesof the companies participating in the operation may constitute apresumption that the operation has tax evasion or tax avoidance as
its principal objective or as one of its principal objectives;
(b) results in a company, whether participating in the operation or not,
no longer fulfilling the necessary conditions for the representationof employees on company organs according to the arrangementswhich were in force prior to that operation.
2. Paragraph 1 (b) shall apply as long as and to the extent that no
Community law provisions containing equivalent rules on representa-
tion of employees on company organs are applicable to the companiescovered by this Directive.
Article 12
1. Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this Directive notlater than 1 January 1992 and shall forthwith inform the Commissionthereof.
2. By way of derogation from paragraph 1, the Portuguese Republic
may delay the application of the provisions concerning transfers of
assets and exchanges of shares until 1 January 1993.
3. Member States shall communicate to the Commission the texts of
the main provisions of national law which they adopt in the fieldcovered by this Directive.
Article 13
This Directive is addressed to the Member States.1990L0434 — EN — 01.05.2004 — 002.001 — 7
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ANNEX
List of companies referred to in Article 3 (a)
(a) companies under Belgian law known as ‘société anonyme’ / ‘naamloze
vennootschap’, ‘société en commandite par actions’ / ‘commanditaire
vennootschap op aandelen’, ‘société privée à responsabilité limitée’ /
‘besloten vennootschap met beperkte aansprakelijkheid’ and those public
law bodies that operate under private law;
(b) companies under Danish law known as: ‘aktieselskab’, ‘anpartsselskab’;
(c) companies under German law known as: ‘Aktiengesellschaf’, ‘Kommandit-
gesellschaft auf Aktien’, ‘Gesellschaft mit beschränkter Haftung’,
‘bergrechtliche Gewerkschaft’;
(d) companies under Greek law known as: ‘ ανώνυµη εταιρεία ’;
(e) companies under Spanish law known as: ‘sociedad anónima’, ‘sociedad
comanditaria por acciones’, ‘sociedad de responsabilidad limitada’ and
those public law bodies which operate under private law;
(f) companies under French law known as ‘société anonyme’, ‘société en
commandite par actions’, ‘société à responsabilité limitée’ and industrial
and commercial public establishments and undertakings;
(g) the companies in Irish law known as public companies limited by shares or
by guarantee, private companies limited by shares or by guarantee, bodies
registered under the Industrial and Provident Societies Acts or building
societies registered under the Building Societies Acts;
(h) companies under Italian law known as ‘società per azioni’, ‘società in
accomandita per azioni’, ‘società a responsabilità limitata’, and public and
private entities carrying on industrial and commercial activities;
(i) companies under Luxembourg law known as ‘société anonyme’, ‘société en
commandite par actions’, ‘société à responsabilité limitée’;
(j) companies under Dutch law known as: ‘naamloze vennootschap’, ‘besloten
vennootschap met beperkte aansprakelijkheid’;
(k) commercial companies or civil law companies having a commercial form as
well as other legal persons carrying on commercial or industrial activities,
which are incorporated in accordance with Portuguese law;
(l) companies incorporated under the law of the United Kingdom;
m) companies under Austrian law known as ‘Aktiengesellschaft’, ‘Gesellschaft
mit beschränkter Haftung’;
n) companies under Finnish law known as ‘osakeyhtiö/aktiebolag’, ‘osuus-
kunta/andelslag’, ‘säästöpankki/sparbank’ et ‘vakuutusyhtiö/
försäkringsbolag’;
o) companies under Swedish law known as ‘aktiebolag’, ‘bankaktiebolag’,
‘försäkringsaktiebolag’;
(p) companies under Czech law known as: ‘akciová spole čnost’, ‘spole čnost s
ručením omezeným’;
(q) companies under Estonian law known as: ‘täisühing’, ‘usaldusühing’,
‘osaühing’, ‘aktsiaselts’, ‘tulundusühistu’;
(r) under Cypriot law: ‘ εταιρείες ’ as defined in the Income Tax laws;
(s) companies under Latvian law known as: ‘akciju sabiedr ība’, ‘sabiedr ība ar
ierobežotu atbild ību’;
(t) companies incorporated under the law of Lithuania;
(u) companies under Hungarian law known as: ‘közkereseti társaság’, ‘betéti
társaság’, ‘közös vállalat’, ‘korlátolt felel ősségűtársaság’, ‘részvénytár-
saság’, ‘egyesülés’, ‘közhasznú társaság’, ‘szövetkezet’;
(v) companies under Maltese law known as: ‘Kumpaniji ta' Responsabilita'
Limitata’, ‘So ċjetajiet en commandite li l-kapital tag ħhom maqsum f'azzjo-
nijiet’;
(w) companies under Polish law known as: ‘spółka akcyjna’, ‘spółka z ogranic-
zonąodpowiedzialno ścią’;
(x) companies under Slovenian law known as: ‘delniška družba’, ‘komanditna
družba’, ‘družba z omejeno odgovornostjo’;
(y) companies under Slovak law known as: ‘Akciová spolo čnosť’, ‘Spolo čnosť
sr učením obmedzeným’, ‘Komanditná spolo čnosť’.1990L0434 — EN — 01.05.2004 — 002.001 — 8
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