1990L0435 — EN — 02.02.2004 — 002.001 — 1
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►B COUNCILDIRECTIVE
of23July1990
onthecommon systemoftaxationapplicable inthe case ofparentcompanies andsubsidiariesof
different Member States
(90/435/EEC)
(OJ L 225, 22.9.1990, p. 6)
Amended by:
Official Journal
No page date
►M1Council Directive 2003/123/EC of 22 December 2003 L 7 41 13.1.2004
Amended by:
►A1Act of Accession of Austria, Sweden and Finland C241 21 29.8.1994
(adapted by Council Decision 95/1/EC, Euratom, ECSC) L 1 1 1.1.1995
Corrected by:►
C1Corrigendum, OJ L 23, 29.1.1991, p. 35 (90/435/EEC)
►C2Corrigendum, OJ L 16, 18.1.1997, p. 98 (90/435/EEC)
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COUNCILDIRECTIVE
of23July1990
on the common system of taxation applicable in the case of parent
companiesandsubsidiariesofdifferentMember States
(90/435/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 the grouping together of companies of different Member
States may be necessary in order to create within the Communityconditions analogous to those of an internal market and in order thusto ensure the establishment and effective functioning of the common
market; whereas such operations ought not to be hampered by restric-
tions, disadvantages or distortions arising in particular from the taxprovisions of the Member States; whereas it is therefore necessary tointroduce withrespect to suchgrouping togeth er of companies ofdifferent Member States, tax rules which are neutral from the point of
view of competition, in order to allow enterprises to adapt to the
requirements of the common market, to increase their productivity andto improve their competitive strength at the international level;
Whereas such grouping together may result in the formation of groups
of parent companies and subsidiaries;
Whereas the existing tax provisions which govern the relations between
parent companies and subsidiaries of different Member States varyappreciably from one Member State to another and are generally lessadvantageous than those applicable to parent companies and subsidi-aries of the same Member State; whereas cooperation between
companies of different Member States is thereby disadvantaged in
comparison withcooperation between companies of th e same MemberState; whereas it is necessary to eliminate this disadvantage by theintroduction of a common system in order to facilitate the groupingtogether of companies;
Whereas where a parent company by virtue of its association with its
subsidiary receives distributed profits, the State of the parent companymust:
— either refrain from taxing such profits,
— or tax such profits while authorizing the parent company to deduct
from the amount of tax due that fraction of the corporation tax paidby the subsidiary which relates to those profits;
Whereas it is furthermore necessary, in order to ensure fiscal neutrality,
that the profits which a subsidiary distributes to its parent company be
exempt from withholding tax; whereas, however, the Federal Republicof Germany and the Hellenic Republic, by reason of the particularnature of their corporate tax systems, and the Portuguese Republic, forbudgetary reasons, should be authorized to maintain temporarily awithholding tax,1990L0435 — EN — 02.02.2004 — 002.001 — 2
(1) OJ No C 39, 22. 3. 1969, p. 7 and Amendment transmitted on 5 July 1985.
(2) OJ No C 51, 29. 4. 1970, p. 6.
(3) OJ No C 100, 1. 8. 1969, p. 7.
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HAS ADOPTED THIS DIRECTIVE:
Article 1
1. Each Member State shall apply this Directive:
— to distributions of profits received by companies of that State which
come from their subsidiaries of other Member States,
— to distributions of profits by companies of that State to companies
of other Member States of which they are subsidiaries,
— to distributions of profits received by permanent establishments
situated in that State of companies of other Member States whichcome from their subsidiaries of a Member State other than thatwhere the permanent establishment is situated,
— to distributions of profits by companies of that State to permanent
establishments situated in another Member State of companies of
the same Member State of which they are subsidiaries.
2. This Directive shall not preclude the application of domestic or
agreement-based provisions required for the prevention of fraud or
abuse.
Article 2
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M11.◄For the purposes of this Directive ‘company of 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 witha th ird State, is not
considered 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,
or to any other tax which may be substituted for any of the above
taxes.
2. For the purposes of this Directive the term ‘permanent establish-
ment’ means a fixed place of business situated in a Member State
through which the business of a company of another Member State iswholly or partly carried on in so far as the profits of that place of busi-ness are subject to tax in the Member State in which it is situated byvirtue of the relevant bilateral tax treaty or, in the absence of such atreaty, by virtue of national law.1990L0435 — EN — 02.02.2004 — 002.001 — 3
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Article 3
1.►M1For the purposes of applying this Directive:
(a) the status of parent company shall be attributed at least to any
company of a Member State which fulfils the conditions set out in
Article 2 and has a minimum holding of 20 % in the capital of a
company of another Member State fulfilling the same conditions;
such status shall also be attributed, under the same conditions, to a
company of a Member State which has a minimum holding of 20 %in the capital of a company of the same Member State, held inwhole or in part by a permanent establishment of the formercompany situated in another Member State;
from 1 January 2007 the minimum holding percentage shall be
15 %;
from 1 January 2009 the minimum holding percentage shall be
10 %;
(b) ‘subsidiary’ shall mean that company the capital of which includes
the holding referred to in (a). ◄
2. By way of derogation from paragraph1, Member States sh all
have the option of:
— replacing, by means of bilateral agreement, the criterion of a
holding in the capital by that of a holding of voting rights,
— not applying this Directive to companies of that Member State
which do not maintain for an uninterrupted period of at least twoyears holdings qualifying them as parent companies or to those of
their companies in which a company of another Member State does
not maintain sucha h olding for an uninterrupted period of at leasttwo years.
Article 4
1. Where a parent company or its permanent establishment, by
virtue of the association of the parent company with its subsidiary,receives distributed profits, the State of the parent company and theState of its permanent establishment shall, except when the subsidiaryis liquidated, either:
— refrain from taxing suchprofits, or
— tax such profits while authorising the parent company and the
permanent establishment to deduct from the amount of tax duethat fraction of the corporation tax related to those profits and paidby the subsidiary and any lower-tier subsidiary, subject to thecondition that at each tier a company and its lower-tier subsidiarymeet the requirements provided for in Articles 2 and 3, up to the
limit of the amount of the corresponding tax due.
1 a. Nothing in this Directive shall prevent the State of the parent
company from considering a subsidiary to be fiscally transparent on
the basis of that State's assessment of the legal characteristics of that
subsidiary arising from the law under which it is constituted and there-fore from taxing the parent company on its share of the profits of itssubsidiary as and when those profits arise. In this case the State of theparent company shall refrain from taxing the distributed profits of thesubsidiary.
When assessing the parent company's share of the profits of its
subsidiary as they arise the State of the parent company shall eitherexempt those profits or authorise the parent company to deduct from
the amount of tax due that fraction of the corporation tax related to
the parent company's share of profits and paid by its subsidiary andany lower-tier subsidiary, subject to the condition that at each tier acompany and its lower-tier subsidiary meet the requirements providedfor in Articles 2 and 3, up to the limit of the amount of the corre-sponding tax due.1990L0435 — EN — 02.02.2004 — 002.001 — 4
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2. However, each Member State shall retain the option of providing
that any charges relating to the holding and any losses resulting fromthe distribution of the profits of the subsidiary may not be deducted
from the taxable profits of the parent company. Where the management
costs relating to the holding in such a case are fixed as a flat rate, thefixed amount may not exceed 5 % of the profits distributed by thesubsidiary.
3.►
M1Paragraphs 1 and 1a shall apply until the date of effective
entry into force of a common system of company taxation. ◄
The Council shall at the appropriate time adopt the rules to apply after
the date referred to in the first subparagraph.
Article 5
1.►M1Profits which a subsidiary distributes to its parent
company shall be exempt from withholding tax. ◄
Article 6
The Member State of a parent company may not charge withholding
tax on the profits which such a company receives from a subsidiary.
Article 7
1. The term ‘withholding tax’ as used in this Directive shall not
cover an advance payment or prepayment (précompte) of corporationtax to the Member State of the subsidiary which is made in connection
witha distribution of profits to its parent company.
2. This Directive shall not affect the application of domestic or
agreement-based provisions designed to eliminate or lessen economicdouble taxation of dividends, in particular provisions relating to thepayment of tax credits to the recipients of dividends.
Article 8
1. Member States shall bring into force the laws, regulations and
administrative provisions necessary for them to comply with this Direc-tive before 1 January 1992. They shall forthwith inform the
Commission thereof.
2. Member States shall ensure that the texts of the main provisions
of domestic law which they adopt in the field covered by this Directiveare communicated to the Commission.
Article 9
This Directive is addressed to the Member States.1990L0435 — EN — 02.02.2004 — 002.001 — 5
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ANNEX
LISTOFCOMPANIESREFERREDTOINARTICLE2(1)(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’, ‘société coopéra-
tive à responsabilité limitée’/‘coöperatieve vennootschap met beperkte
aansprakelijkheid’, ‘société coopérative à responsabilité illimitée’/‘coöpera-
tieve vennootschap met onbeperkte aansprakelijkheid’, ‘société en nom
collectif’/‘vennootschap onder firma’, ‘société en commandite simple’/
‘gewone commanditaire vennootschap’, public undertakings which have
adopted one of the abovementioned legal forms, and other companies
constituted under Belgian law subject to Belgian corporate tax;
(b) companies under Danishlaw known as ‘aktieselskab’ and ‘anpartsselskab’.
Other companies subject to tax under the Corporation Tax Act, insofar as
their taxable income is calculated and taxed in accordance with the general
tax legislation rules applicable to ‘aktieselskaber’;
(c) companies under German law known as ‘Aktiengesellschaft’, ‘Kommandit-
gesellschaft auf Aktien’, ‘Gesellschaft mit beschränkter Haftung’,
‘Versicherungsverein auf Gegenseitigkeit’, ‘Erwerbs- und Wirtschaftsgen-
ossenschaft’, ‘Betriebe gewerblicher Art von juristischen Personen des
öffentlichen Rechts’, and other companies constituted under German law
subject to German corporate tax;
(d) companies under Greek law known as ‘ αvώvυµη εταιρεία ’, ‘εταιρεία
περιωρισµέ vης ευθύvης (Ε.Π.Ε.) ’ and other companies constituted under
Greek law subject to Greek corporate tax;
(e) companies under Spanishlaw known as: ‘sociedad anónima’, ‘sociedad
comanditaria por acciones’, ‘sociedad de responsabilidad limitada’, public
law bodies which operate under private law. Other entities constituted
under Spanishlaw subject to Spanishcorporate tax (‘Impuesto sobre Soci-
edades’);
(f) companies under Frenchlaw known as ‘société anonyme’, ‘société en
commandite par actions’, ‘société à responsabilité limitée’, ‘sociétés par
actions simplifiées’, ‘sociétés d'assurances mutuelles’, ‘caisses d'épargne et
de prévoyance’, ‘sociétés civiles’ which are automatically subject to
corporation tax, ‘coopératives’, ‘unions de coopératives’, industrial and
commercial public establishments and undertakings, and other companies
constituted under Frenchlaw subject to Frenchcorporate tax;
(g) companies incorporated or existing under Irishlaw, bodies registered under
the Industrial and Provident Societies Act, building societies incorporated
under the Building Societies Acts and trustee savings banks within the
meaning of the Trustee Savings Banks Act, 1989;
(h) companies under Italian law known as ‘società per azioni’, ‘società in
accomandita per azioni’, ‘società a responsibilità limitata’, ‘società coop-
erative’, ‘società di mutua assicurazione’, and private and public entities
whose activity is wholly or principally commercial;
(i) companies under Luxembourg law known as ‘société anonyme’, ‘société en
commandite par actions’, ‘société à responsabilité limitée’, ‘société
coopérative’, ‘société coopérative organisée comme une société anonyme’,
‘association d'assurances mutuelles’, ‘association d'épargne-pension’,
‘entreprise de nature commerciale, industrielle ou minière de l'Etat, des
communes, des syndicats de communes, des établissements publics et des
autres personnes morales de droit public’, and other companies constituted
under Luxembourg law subject to Luxembourg corporate tax;
(j) companies under Dutchlaw known as ‘naamloze vennnootsch ap’, ‘besloten
vennootschap met beperkte aansprakelijkheid’, ‘Open commanditaire
vennootschap’, ‘Coöperatie’, ‘onderlinge waarborgmaatschappij’, ‘Fonds
voor gemene rekening’, ‘vereniging op coöperatieve grondslag’, ‘vereniging
welke op onderlinge grondslag als verzekeraar of kredietinstelling
optreedt’, and other companies constituted under Dutch law subject to
Dutchcorporate tax;
(k) companies under Austrian law known as ‘Aktiengesellschaft’, ‘Gesellschaft
mit beschränkter Haftung’, ‘Versicherungsvereine auf Gegenseitigkeit’,
‘Erwerbs- und Wirtschaftsgenossenschaften’, ‘Betriebe gewerblicher Art
von Körperschaften des öffentlichen Rechts’, ‘Sparkassen’, and other
companies constituted under Austrian law subject to Austrian corporate tax;
(l) commercial companies or civil law companies having a commercial form
and cooperatives and public undertakings incorporated in accordance with
Portuguese law;1990L0435 — EN — 02.02.2004 — 002.001 — 6
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(m) companies under Finnishlaw known as ‘osakeyh tiö/aktiebolag’, ‘osuus-
kunta/andelslag’,‘säästöpankki/sparbank’and ‘vakuutusyhtiö/
försäkringsbolag’;
(n) companies under Swedishlaw known as ‘aktiebolag’, ‘försäkringsaktie-
bolag’, ‘ekonomiska föreningar’, ‘sparbanker’, ‘ömsesidiga
försäkringsbolag’;
(o) companies incorporated under the law of the United Kingdom;
(p) companies incorporated under Council Regulation (EC) No 2157/2001 of 8
October 2001 on the Statute for a European company (SE) and Council
Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a
European company withregard to th e involvement of employees and coop-
erative societies incorporated under Council Regulation (EC) No 1435/2003
of 22 July 2003 on the Statute for a European Cooperative Society (SCE)
and Council Directive 2003/72/EC of 22 July 2003 supplementing the
Statute for a European Cooperative Society withregard to th e involvement
of employees.1990L0435 — EN — 02.02.2004 — 002.001 — 7