1990L0435 — EN — 01.05.2004 — 003.001 — 1
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►B COUNCIL DIRECTIVE
of 23 July 1990
on the common system of taxation applicable in the case of parent companies and subsidiaries of
different Member States
(90/435/EEC)
(OJ L 225, 22.9.1990, p. 6)
Amended by:
Official Journal
No page date
►M1 Council Directive 2003/123/EC of 22 December 2003 L 7 41 13.1.2004
Amended by:
►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 Slovak
Republic and the adjustments to the Treaties on which the EuropeanUnion is foundedL 236 33 23.9.2003
Corrected by:
►C1 Corrigendum, OJ L 23, 29.1.1991, p. 35 (90/435/EEC)
►C2 Corrigendum, OJ L 16, 18.1.1997, p. 98 (90/435/EEC)
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COUNCIL DIRECTIVE
of 23 July 1990
on the common system of taxation applicable in the case of parent
companies and subsidiaries of different Member 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 with respect to such grouping together 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 with cooperation between companies of the 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 — 01.05.2004 — 003.001 — 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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M1 1.◄ 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 a
double 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 osob in the Czech Republic,
— Tulumaks in Estonia,—Φόρος Εισοδήµατος in Cyprus,
—u z ņēmumu ien ākuma nodoklis in Latvia,
— Pelno mokestis in Lithuania,— Társasági adó, osztalékadó 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,1990L0435 — EN — 01.05.2004 — 003.001 — 3
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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 Statethrough 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 by
virtue of the relevant bilateral tax treaty or, in the absence of such atreaty, by virtue of national law.
Article 3
1. ►
M1 For 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 acompany 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 paragraph 1, Member States shall
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 such a holding 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 such profits, 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 onthe basis of that State's assessment of the legal characteristics of thatsubsidiary arising from the law under which it is constituted and there-fore from taxing the parent company on its share of the profits of its1990L0435 — EN — 01.05.2004 — 003.001 — 4
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subsidiary as and when those profits arise. In this case the State of the
parent 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 fromthe amount of tax due that fraction of the corporation tax related tothe parent company's share of profits and paid by its subsidiary andany lower-tier subsidiary, subject to the condition that at each tier a
company and its lower-tier subsidiary meet the requirements provided
for in Articles 2 and 3, up to the limit of the amount of the corre-sponding tax due.
2. However, each Member State shall retain the option of providing
that any charges relating to the holding and any losses resulting from
the distribution of the profits of the subsidiary may not be deducted
from the taxable profits of the parent company. Where the managementcosts 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. ►
M1 Paragraphs 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. ►M1 Profits 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
with a 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 — 01.05.2004 — 003.001 — 5
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ANNEX
LIST OF COMPANIES REFERRED TO IN ARTICLE 2(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 Danish law 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 ευθύ vης (Ε.Π.Ε.) ’ and other companies constituted under
Greek law subject to Greek corporate tax;
(e) companies under Spanish law known as: ‘sociedad anónima’, ‘sociedad
comanditaria por acciones’, ‘sociedad de responsabilidad limitada’, public
law bodies which operate under private law. Other entities constituted
under Spanish law subject to Spanish corporate tax (‘Impuesto sobre Soci-
edades’);
(f) companies under French law 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 French law subject to French corporate tax;
(g) companies incorporated or existing under Irish law, 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 Dutch law known as ‘naamloze vennnootschap’, ‘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
Dutch corporate 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 — 01.05.2004 — 003.001 — 6
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(m) companies under Finnish law known as ‘osakeyhtiö/aktiebolag’, ‘osuus-
kunta/andelslag’,‘säästöpankki/sparbank’and ‘vakuutusyhtiö/
försäkringsbolag’;
(n) companies under Swedish law 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 with regard to the 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 with regard to the involvement
of employees;
(q) companies under Czech law known as: ‘akciová spole čnost’, ‘spole čnost s
ručením omezeným’;
(r) companies under Estonian law known as: ‘täisühing’, ‘usaldusühing’,
‘osaühing’, ‘aktsiaselts’, ‘tulundusühistu’;
(s) under Cypriot law: ‘ εταιρείες ’ as defined in the Income Tax laws;
(t) companies under Latvian law known as: ‘akciju sabiedr ība’, ‘sabiedr ība ar
ierobežotu atbild ību’;
(u) companies incorporated under the law of Lithuania;(v) companies under Hungarian law known as: ‘közkereseti társaság’, ‘betéti
társaság’, ‘közös vállalat’, ‘korlátolt felel ősségűtársaság’, ‘részvénytár-
saság’, ‘egyesülés’, ‘szövetkezet’;
(w) companies under Maltese law known as: ‘Kumpaniji ta' Responsabilita'
Limitata’, ‘So ċjetajiet en commandite li l-kapital tag ħhom maqsum f'azzjo-
nijiet’;
(x) companies under Polish law known as: ‘spółka akcyjna’, ‘spółka z ogranic-
zonąodpowiedzialno ścią’;
(y) companies under Slovenian law known as: ‘delniška družba’, ‘komanditna
družba’, ‘družba z omejeno odgovornostjo’;
(z) companies under Slovak law known as: ‘akciová spolo čnosť’, ‘spolo čnosťs
ručením obmedzeným’, ‘komanditná spolo čnosť’.1990L0435 — EN — 01.05.2004 — 003.001 — 7
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