TEXT PROPOSED BY THE COMMISSION AMENDMENT

Amendment 26

Proposal for a directive – amending act Recital 9 a (new)

(9a) In accordance with the ECOFIN Council conclusions of May 1999 and November 2000, the original choice to exclude all innovative financial products from the scope of Directive 2003/48/EC was accompanied by an express statement that this issue should be re-examined on the occasion of the first review of that Directive, with the aim of finding a definition covering all securities that are equivalent to debt claims so as to ensure the effectiveness of the Directive in a changing environment and to preventing market distortions. It is therefore appropriate to include all innovative financial products within the scope of the Directive. Accordingly the definition of interest payment should cover any revenue arising from the investment of capital where the return is fixed ex ante and the substance of the return arising from a transaction is similar to any interest income. In order to ensure a consistent interpretation of that provision throughout the Member States, the provision should be complemented by a list of the financial products concerned. The Commission should adopt that list in accordance with the regulatory procedure laid down in Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (1).

Amendment 1

Proposal for a directive – amending act Recital 10 a (new)

(10a) The Community should promote global tax governance, in line with the Council conclusions of 23 October 2006, which invited the Commission to explore the possibility of negotiating specific agreements with Hong Kong, Macao and Singapore on savings tax with a view to concluding an international agreement on the application of equivalent measures to those applied by Member States under Directive 2003/48/EC.

Amendment 2

Proposal for a directive – amending act Recital 12 a (new)

(12a) The Council Conclusions of 21 January 2003 considered that the United States of America applies measures equivalent to those provided for in Directive 2003/48/EC. However, it is appropriate to bring within the scope of Annex I of Directive 2003/48/EC certain legal forms and arrangements in order to ensure effective taxation.

Amendment 3

Proposal for a directive – amending act Recital 13 a (new)

(13a) In reviewing the operation of Directive 2003/48/EC, the Commission should pay specific attention to certain types of capital income, such as income derived from life assurance products, annuities, swaps, and certain pensions, which are not yet within the scope of that Directive.

Amendment 4

Proposal for a directive – amending act Article 1 – point -1 (new) Directive 2003/48/EC Recital 8

(-1) Recital 8 is replaced by the following: ‘(8) This Directive has a dual purpose: to enable savings income in the form of interest payments made in one Member State to beneficial owners who are individuals resident for tax purposes in another Member State to be made subject to effective taxation in accordance with the laws of their Member State of residence, and to ensure a minimum of effective taxation of savings income in the form of interest payments made in one Member State to beneficial owners who are individuals resident for tax purposes in another Member State.’

Amendment 5

Proposal for a directive – amending act Article 1 – point -1 a (new) Directive 2003/48/EC Recital 19

(-1a) Recital 19 is replaced by the following: ‘(19) Member States levying withholding tax should transfer most of the revenue they obtain from that withholding tax to the Member State of residence of the beneficial owner of the interest. The part of the revenue that the Member States concerned are able to withhold should be proportional to the administrative costs incurred in handling the revenue-sharing mechanism, taking into account the costs that would be incurred in exchanging information.’

Amendment 6

Proposal for a directive – amending act Article 1 – point -1 b (new) Directive 2003/48/EC Recital 24 a (new)

(-1b) The following recital is inserted: ‘(24a) So long as Hong Kong, Singapore and other countries and territories listed in Annex I do not all apply measures identical or equivalent to those provided for in this Directive, capital flight towards those countries and territories could imperil the attainment of the objectives of this Directive. It is therefore necessary for the Community to take appropriate action in order to ensure that an agreement is reached with those countries and territories under which they will apply such measures.’

Amendment 7

Proposal for a directive – amending act Article 1 – point -1 c (new) Directive 2003/48/EC Article 1 – paragraph 1

(-1c) Article 1(1) is replaced by the following: ‘1. This Directive aims to: — enable savings income in the form of interest payments made in one Member State to beneficial owners who are individuals resident for tax purposes in another Member State to be made subject to effective taxation in accordance with the laws of the latter Member State; — ensure a minimum of effective taxation of savings income in the form of interest payments made in one Member State to beneficial owners who are individuals resident for tax purposes in another Member State.’

Amendment 8

Proposal for a directive – amending act Article 1 – point 1 Directive 2003/48/EC Article 1 – paragraph 2

2. Member States shall take the necessary measures to ensure that the tasks necessary for the implementation of this Directive are carried out by paying agents established within their territory, irrespective of the place of establishment of the debtor of the debt claim, or the issuer of the security, producing the interest payment. 2. Member States shall take the necessary measures to ensure that the tasks necessary for the implementation of this Directive are carried out by economic operators and paying agents established within their territory, irrespective of the place of establishment of the debtor of the debt claim, or the issuer of the security, producing the interest payment.

Amendment 9

Proposal for a directive – amending act Article 1 – point 2 – point a – subpoint i Directive 2003/48/EC Article 2 – paragraph 1 – introductory part

For the purposes of this Directive, and without prejudice to Article 4(2), ‘beneficial owner’ means any individual who receives an interest payment or any individual for whom such a payment is secured, unless he provides evidence that it was not received or secured for his own benefit, that is to say that: 1. For the purposes of this Directive, and without prejudice to Article 4(2), ‘beneficial owner’ means any individual who receives or should have received an interest payment or any individual for whom such a payment is secured or should be secured , unless he provides evidence that it was not received or secured for his own benefit, that is to say that:

Amendment 10

Proposal for a directive – amending act Article 1 – point 3 Directive 2003/48/EC Article 3 – paragraph 2 – subparagraph 1 – point b

(b) for contractual relations entered into, or transactions carried out in the absence of contractual relations, on or after 1 January 2004, the paying agent shall establish the identity of the beneficial owner, consisting of the name, address, date and place of birth and, if the beneficial owner has his address or otherwise proves to be resident for tax purposes in a Member State listed in Annex II, the tax identification number or equivalent allocated by that Member State. (b) for contractual relations entered into, or transactions carried out in the absence of contractual relations, on or after 1 January 2004, the paying agent shall establish the identity of the beneficial owner, consisting of the name, address, date and place of birth and, if the beneficial owner has his address or otherwise proves to be resident for tax purposes in a Member State listed in Annex II, the tax identification number or equivalent allocated by that Member State , when that number or equivalent appears in the documentation presented for identification .

Amendment 11

Proposal for a directive – amending act Article 1 – point 3 Directive 2003/48/EC Article 3 – paragraph 2 – subparagraph 2

The details referred to in point (b) of the first subparagraph shall be established on the basis of the passport or of the official identity card or other official document listed in Annex II presented by the beneficial owner. Any such details which do not appear on that passport or on that official identity card or official document shall be established on the basis of any other official documentary proof of identity presented by the beneficial owner and issued by a public authority of the country where he has his address or otherwise proves to be resident for tax purposes. The details referred to in point (b) of the first subparagraph shall be established on the basis of a passport or of an official identity card or other official document listed in Annex II presented by the beneficial owner. Any such details which do not appear on a passport or on an official identity card or on any other official document shall be established on the basis of any other official documentary proof of identity presented by the beneficial owner and issued by a public authority of the country where he has his address or otherwise proves to be resident for tax purposes.

Amendment 12

Proposal for a directive – amending act Article 1 – point 3 Directive 2003/48/EC Article 4 – paragraph 2 – subparagraph 2

For the purpose of the first subparagraph a legal arrangement shall be considered to have its place of effective management in the country where the person who primarily holds legal title and primarily manages its property and income has his or its permanent address. For the purpose of the first subparagraph a legal arrangement shall be considered to have its place of effective management in the country where the person who primarily holds legal title and primarily manages its property or income has his or its permanent address.

Amendment 13

Proposal for a directive – amending act Article 1 – point 3 Directive 2003/48/EC Article 4 – paragraph 2 – subparagraph 7

Any economic operator making an interest payment to, or securing an interest payment for, an entity or legal arrangement included in the list set out in Annex III shall communicate to the competent authority of its Member State of establishment the name and place of effective management of the entity, or in the case of a legal arrangement, the name and the permanent address of the person who primarily holds legal title and primarily manages the property and income of the legal arrangement, and the total amount of interest paid to, or secured for, the entity or legal arrangement. Where the place of effective management of the entity or legal arrangement is located in another Member State, the competent authority shall pass this information on to the competent authority of that other Member State. Any economic operator making an interest payment to, or securing an interest payment for, an entity or legal arrangement included in the list set out in Annex III shall communicate to the competent authority of its Member State of establishment the name and place of effective management of the entity, or in the case of a legal arrangement, the name and the permanent address of the person who primarily holds legal title and primarily manages the property or income of the legal arrangement, and the total amount of interest paid to, or secured for, the entity or legal arrangement. Where the place of effective management of the entity or legal arrangement is located in another Member State, the competent authority shall pass this information on to the competent authority of that other Member State.

Amendment 14

Proposal for a directive – amending act Article 1 – point 3 Directive 2003/48/EC Article 4 – paragraph 3

‘3. Those entities and legal arrangements referred to in paragraph 2 to whose assets or income no beneficial owner is immediately entitled at the moment of receipt of an interest payment shall have the option of being treated for the purposes of this Directive as an undertaking for collective investment or other collective investment fund or scheme as referred to in point (a) of paragraph 2. Where an entity or legal arrangement exercises that option, the Member State in which it has its place of effective management shall issue a certificate to that effect. The entity or legal arrangement shall present that certificate to the economic operator making or securing the interest payment. Member States shall lay down the detailed rules concerning this option for entities and legal arrangements which have their place of effective management in their territory and shall ensure that the entity or legal arrangement having exercised this option acts as paying agent in accordance with paragraph 1, up to the total amount of the interest payments received, on each occasion that a beneficial owner becomes immediately entitled to its assets or income.’ deleted

Amendment 27

Proposal for a directive – amending act Article 1 – point 4 Directive 2003/48/EC Article 6 – paragraph -1 (new)

-1. Without prejudice to the provisions laid down in the following paragraphs of this Article, the general principle under this Directive is that ‘interest payment’ means any revenue arising from the investment of capital where the return is fixed ex ante and the substance of the return arising from a transaction is similar to any interest income. In order to ensure a consistent interpretation of this provision throughout the Member States, it shall be complemented by a list of the financial products concerned. The Commission shall adopt this list by … [the date specified in Article 2(1) of Council Directive 2009/…/EC amending Directive 2003/48/EC on taxation of savings income in the form of interest payments] in accordance with the regulatory procedure referred to in Article 18b(2) of this Directive.

Amendment 15

Proposal for a directive – amending act Article 1 – point 4 Directive 2003/48/EC Article 6 – paragraph 1 – point c – subpoint ii

(ii) entities or legal arrangements having exercised the option under Article 4(3); deleted

Amendment 16

Proposal for a directive – amending act Article 1 – point 4 Directive 2003/48/EC Article 6 – paragraph 1 – point d – subpoint ii

(ii) entities or legal arrangements having exercised the option under Article 4(3); deleted

Amendment 35

Proposal for a directive – amending act Article 1 – point 4 Directive 2003/48/EG Article 6 – paragraph 1 – point e

(e) benefits from a life insurance contract where the contract provides for a biometric risk coverage which, expressed as an average over the duration of the contract, is lower than 5 % of the capital insured and its actual performance is fully linked to interest or income of the kinds referred to in points (a), (aa), (b), (c) and (d); for this purpose any difference between the amounts paid out pursuant to a life insurance contract and the sum of all the payments made to the life insurer under the same life insurance contract shall be considered benefits from life insurance contracts. (e) in the case of insurance contracts : (i) the difference between the insurance benefit and the sum of contributions paid in the event of the redemption of the contract in the case of endowment retirement insurance, where no lifelong pension is paid; (ii) benefits from a life insurance contract where the contract provides for a biometric risk coverage which, expressed as an average over the duration of the contract, is lower than 10 % of the initial capital insured and its actual performance is linked to interest or its actual performance is expressed in or directly linked to units and more than 40 % of the underlying assets is invested in income of the kinds referred to in points (a), (aa), (b), (c) and (d). Where for a unit linked insurance contract a paying agent has no information concerning the percentage of the underlying assets invested in debt claims or the relevant securities, that percentage shall be deemed to be above 40 %. For this purpose any difference between the amounts paid out pursuant to a life insurance contract and the sum of all the payments made to the life insurer under the same life insurance contract shall be considered benefits from life insurance contracts. Where the underwriter of the contract, the insured person and the beneficiary are not identical, the biometric risk coverage is deemed to be lower than 10 %.

Amendment 36

Proposal for a directive – amending act Article 1 – point 4 Directive 2003/48/EG Article 6 – paragraph 1 – point e a (new)

(ea) income from structured products. Structured products are bonds for which the level of repayment obligations depends on developments in some form of agreed base value. The difference between the purchase cost and the revenue from the sale, refund or redemption of the structured product is also considered to be income;

Amendment 37

Proposal for a directive – amending act Article 1 – point 4 Directive 2003/48/EG Article 6 – paragraph 1 – point e b (new)

(eb) dividends received by a credit institution or financial institution on behalf of the beneficial owner.

Amendment 18

Proposal for a directive – amending act Article 1 – point 4 Directive 2003/48/EC Article 6 – paragraph 9

9. Income referred to in point (aa) of paragraph 1 shall be considered to be an interest payment only to the extent to which the securities producing that income were first issued on or after 1 December 2008 . 9. Income referred to in point (aa) of paragraph 1 shall be considered to be an interest payment only to the extent to which the securities producing that income were first issued six months after the date of publication of this Directive or later .

Amendment 19

Proposal for a directive – amending act Article 1 – point 4 Directive 2003/48/EC Article 6 – paragraph 10

10. Benefits from life insurance contracts shall be considered to be an interest payment in accordance with point (e) of paragraph 1 only to the extent to which the life insurance contracts giving rise to such benefits were first subscribed on or after 1 December 2008 . 10. Benefits from life insurance contracts shall be considered to be an interest payment in accordance with point (e) of paragraph 1 only to the extent to which the life insurance contracts giving rise to such benefits were first subscribed six months after the date of publication of this Directive or later .

Amendment 20

Proposal for a directive – amending act Article 1 – point 5 a (new) Directive 2003/48/EC Article 10 – paragraph 2

(5a) Article 10(2) is replaced by the following: ‘The transition period shall end no later than 1 July 2014 or at the end of the first full fiscal year following the later of the dates given below, provided that this is earlier than 1 July 2014: — the date of entry into force of the latest agreement between the European Community, following a unanimous decision of the Council, and the Swiss Confederation, the Principality of Liechtenstein, the Republic of San Marino, the Principality of Monaco and the Principality of Andorra, providing for the exchange of information upon request as defined in the OECD Model Agreement on Exchange of Information on Tax Matters released on 18 April 2002 (hereinafter the ‘OECD Model Agreement’) with respect to interest payments, as defined in this Directive, made by paying agents established within their respective territories to beneficial owners resident in the territory to which the Directive applies, in addition to the simultaneous application by those same countries of a withholding tax on such payments at the rate defined for the corresponding periods referred to in Article 11(1), — the date on which the Council agrees by unanimity that the United States of America is committed to exchange of information upon request as defined in the OECD Model Agreement with respect to interest payments, as defined in this Directive, made by paying agents established within its territory to beneficial owners resident in the territory to which the Directive applies. — the date on which the Council agrees by unanimity that Hong Kong, Singapore and other countries and territories listed under Annex I are committed to exchanging information upon request as defined in the OECD Model Agreement with respect to interest payments, as defined in this Directive, made by paying agents established within their territory to beneficial owners resident in the territory to which the Directive applies.’

Amendment 21

Proposal for a directive – amending act Article 1 – point 6 a (new) Directive 2003/48/EC Article 12 – paragraphs 1 and 2

(6a) Article 12(1) and (2) are replaced by the following: ‘1. Member States levying withholding tax in accordance with Article 11(1) shall retain 10 % of their revenue and transfer 90 % of the revenue to the Member State of residence of the beneficial owner of the interest. 2. Member States levying withholding tax in accordance with Article 11(5) shall retain 10 % of the revenue and transfer 90 % to the other Member States proportionate to the transfers carried out pursuant to paragraph 1 of this Article.’

Amendment 22

Proposal for a directive – amending act Article 1 – point 10 Directive 2003/48/EC Article 18

(10) The first sentence of Article 18 is replaced by the following: ‘The Commission shall report to the Council every three years on the operation of this Directive on the basis of the statistics listed in Annex V, which shall be provided by each Member State to the Commission.’ (10) Article 18 is replaced by the following: ‘Article 18 Review 1. By 31st of December 2010, the Commission shall present a comparative study analysing advantages and weaknesses of both the systems of exchange of information and of the withholding tax so as to assess the objective of effective suppression of fiscal fraud and evasion. That comparative study should take into consideration, in particular, aspects of transparency, respect of fiscal sovereignty of the Member States, fiscal justice and administrative burden attached to any of the two systems. 2. The Commission shall report to the Council and the European Parliament every three years on the operation of this Directive on the basis of the statistics listed in Annex V, which shall be provided by each Member State to the Commission. On the basis of those reports and the study referred to in paragraph 1, and in particular in relation to the end of transitional period referred to in Article 10(2), the Commission, shall, where appropriate, propose to the Council any amendments to this Directive that prove necessary in order to ensure effective taxation of savings income and to remove undesirable distortions of competition. 3. In the context of the study and the reports referred to in paragraphs 1 and 2, the Commission shall examine, in particular, whether it is appropriate to extend the scope of this Directive to all sources of financial income, including dividends and capital gains, as well as to payments made to all legal persons.’

Amendment 23

Proposal for a directive – amending act Article 1 – point 11 Directive 2003/48/EC Article 18 b – paragraph 3 a (new)