COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(90) 94 final 
Brussels, 23 March 1990 
Proposal for a 
COUNCIL DIRECTIVE 
amending Directive 69/335/EEC concerning 
indirect taxes on the raising of capital 
(presented by the Commission) 
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1. Within the same Member State, collective investment undertakings may. 
depending on their legal form, be subject to two different sets of rules 
governing tax on the raising of capital. 
In the case of investment companies with variable or fixed capital, the 
rules laid down by Directive 69/S357EBC must necessarily be applied. 
Essentially these provide that Member States may either exempt all 
transactions from capital duty or make them subject to a uniform rate 
not exceeding 1%. 
Other companies, firms, associations or legal persons operating for 
profit, such as investment funds, are also covered in principle by the 
Directive, but the Member States are left free to exclude them and, 
consequently, not to apply the harmonized capital duty. 
The Commission takes the view that this differential treatment is 
unjustified and that Member States should be put in a position to avoid 
it. The attached proposal for a Directive therefore makes it possible 
for Member States to exempt from the general rules contributions of 
capital to collective investment undertakings established in the form of 
investment oompanies. 
2. A second Justification for the proposal lies in the fact that tax rules 
which are more favourable to collective Investment oompanies are a 
logical response to the eoonomio and, above all, social function which 
they fulfil. This is because small savers too often find it difficult 
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to turn directly to the stock exchange, partly because they are 
unfamiliar with the mechanism and procedures, but also because of the 
small amounts which they are generally able to Invest and which rule out 
any adequate spreading of risks. 
Collective investment undertakings are therefore very useful 
intermediaries for this type of saver. 
3. In defining collective Investment undertakings for the purposes of this 
proposal for a Directive, the definition of the WILTS (undertaking for 
collective Investment in transferable securities) contained in Directive 
85/611/EBC1 has been adhered to as closely as possible. However, the 
following departures have proved necessary: 
(a) the proposed definition oovers only collective investment 
undertakings constituted under statute, i.e. investment companies. 
This is because, as Indicated at point 1 above, other undertakings 
such as investment funds or unit trusts may already be excluded 
from the scope of capital duty. 
(b) there Is no requirement that collective investment companies invest 
solely in transferable securities, a restriction that has been 
deemed neither appropriate nor necessary. 
1 OJ No L 375, 31.12.1965, p. 3. 
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Proposal for a 
Council Directive 
amending Directive 69/335/EBC oonoerning Indirect taxes on the raising of 
capital 
THE UUUNULb OF THE B0R3PEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
and in particular Article 99 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Parliament, 
Having regard to the opinion of the Economic and Social Committee, 
Whereas Directive 69/335/EBC,1 as last amended by Directive 85/303/EEC,2 
harmonized taxes on the raising of capital; whereas that Directive applies 
to capital oampanles and to any other oompany, firm, association or legal 
person operating for profit; whereas Member States may, however, refrain 
from applying it to the second category of undertaking; 
Whereas Member States may either exempt transactions falling within the 
scope of the Directive, or make them subject to capital duty at a uniform 
rate not exceeding 1%; 
Whereas collective investment undertakings may or may not take the legal 
form of a capital company; whereas they might consequently be governed 
within the same Member State by two different sets of tax rules; whereas 
that possibility should be eliminated; 
1 GT Ho L 249, 3.10.1968, p. 25. 
g OJ Ho L IBS, 15.6.1985, p. 23. 
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Whereas it Is desirable, for both economic and social reasons, that access 
to collective investment undertakings be facilitated; 
Whereas these alms may be achieved by authorizing Member States to exempt 
contributions of capital to collective Investment undertakings constituted 
under statute as investment companies, 
HAS ADOPTED TECS DIRECTIVE: 
Article 1 
Article 7 of Directive 69/335/EBC is hereby amenderl as follows: 
1. Paragraph 3 shall become paragraph 4. 
2. The following paragraph 3 shall be inserted after paragraph 2: 
N3. By way of derogation from paragraph 2, Member States may exempt 
contributions of capital to collective Investment undertakings. 
For the purposes of this Directive, collective investment undertakings 
means undertakings constituted under statute (investment companies) which 
have as their sole object the collective Investment of capital raised from 
the public and which operate on the principle of risk-spreading. " 
Article 3 
This Directive is addressed to the Member States. 
Done at Brussels, 
For the Council 
The President 
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FIŒE SME 
Competitiveness and employment 1 
The proposal intends to amend the Directive 69/335/EEC in order to permit 
Member States to exempt contributions of capita], to collective Investment 
companies from indirect taxes on the raising of capital. It does not 
involve new obligations for enterprises; on the contrary, this tax relief 
should stimulate the development of collective investment companies 
EN ISSN 0254-1475 
COM(90) 94 final 
DOCUMENTS 
10 09 
Catalogue number : CB-CO-90-119-EN-C 
ISBN 92-77-58540-4 
Office for Official Publications of the European Communities 
L-2985 Luxembourg