Legislative resolution embodying Parliament's opinion on the proposal for a Council Directive to ensure a minimum of effective taxation of savings income in the form of interest payments within the Community(COM(98)0295 C4-0404/ 98 98/0193(CNS))(Consultation procedure)
Date: 1999-02-10
Institutions: Committee on Economic and Monetary Affairs, European Parliament
Subjects: approximation of laws, direct tax, fiscal policy, pension scheme, restriction on competition, tax on investment income













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51999AP0040

Legislative resolution embodying Parliament's opinion on the proposal for a Council Directive to ensure a minimum of effective taxation of savings income in the form of interest payments within the Community(COM(98)0295 C4-0404/ 98 98/0193(CNS))(Consultation procedure)  


Official Journal C 150 , 28/05/1999 P. 0184 





A4-0040/99Proposal for a Council Directive to ensure a minimum of effective taxation of savings income in the form of interest payments within the Community (COM(98)0295 - C4-0404/98 - 98/0193(CNS))The proposal was approved with the following amendments:(Amendment 1)Recital 6>Original text>(6) Whereas this scope for tax avoidance is creating, in capital movements between Member States, economic distortions which are incompatible with the existence of the internal market;>Text following EP vote>(6)Whereas this scope for tax avoidance is creating, in capital movements between Member States, economic distortions which are incompatible with the existence of the internal market; whereas harmonisation within the Community carries the risk of capital flight to third countries and a regulation of this kind must therefore include such countries;(Amendment 2)Recital 7a (new)>Original text>>Text following EP vote>(7a) Whereas this Directive is part of a more general package of measures aimed at fighting harmful tax competition in the internal market, as defined by the conclusions of the Ecofin Council, without prejudicing fair tax competition and the subsequent beneficial lowering of fiscal pressure in the European Union;(Amendment 3)Recital 8a (new)>Original text>>Text following EP vote>(8a) Whereas, however, the minimum tax rate on savings must apply to interest received by physical persons either directly or indirectly through undertakings for collective investment in transferable securities (Ucits);(Amendment 4)Recital 11a (new)>Original text>>Text following EP vote>(11a) Whereas under international tax agreements the withholding tax likely to be applied by the source State to interest paid to a non-resident exceeds 15% only in exceptional circumstances;(Amendment 5)Recital 22>Original text>(22) Whereas the Council, in its conclusions of 1 December 1997 regarding the taxation of savings, emphasised the need to preserve the competitiveness of European financial markets, and stated that the basic principles of any Directive on the subject should be adopted as widely as possible; whereas, to this end, the Community must enter into negotiations with its main third country commercial partners, either on a bilateral or on a multilateral basis, in order to ensure the effective taxation of income from savings covered by this Directive which is paid to residents for tax purposes of the Member States by paying agents established in such third countries;>Text following EP vote>(22)Whereas the Council, in its conclusions of 1 December 1997 regarding the taxation of savings, emphasised the need to preserve the competitiveness of European financial markets, and stated that the basic principles of any Directive on the subject should be adopted as widely as possible; whereas, to this end, the Community must enter into negotiations with its main third country commercial partners, either on a bilateral or on a multilateral basis, in order to ensure the effective taxation of income from savings covered by this Directive which is paid to residents for tax purposes of the Member States by paying agents established in such third countries; whereas the countries with which an agreement is to be reached must at first include those neighbouring countries which grant non-residents a particularly favourable tax treatment which is liable to undermine the effectiveness of this Directive; whereas such agreement must then gradually be extended to at least all OECD member countries;(Amendment 25)Recital 23a (new)>Original text>>Text following EP vote>(23a) Whereas this Directive represents a first step in achieving a minimum of effective taxation of savings income in the form of interest payments; whereas additional steps are required in order to achieve harmonisation in the field of taxation of capital gains within the Community;(Amendment 6)Article 1(1)>Original text>1. Member States shall take the necessary measures to allow a minimum of effective taxation of interest paid to individuals who have their residence for tax purposes in a Member State other than the one where payment is made by a paying agent.>Text following EP vote>1.Member States shall take the necessary measures to allow a minimum of effective taxation of interest paid, either directly or indirectly through undertakings for collective investment in transferable securities (Ucits), to individuals who have their residence for tax purposes in a Member State other than the one where payment is made by a paying agent.(Amendment 7)Article 5(b)>Original text>(b) the increase in value of debt-claims in respect of which the income, by contract, consists, wholly or partly, of that increase in value, irrespective of the nature of that increase. The interest to be taken into consideration in such circumstances is the difference, paid by the paying agent on redemption, between the capital reimbursed and the issue price of the corresponding securities;>Text following EP vote>(b)the increase in value of debt-claims in respect of which the income, by contract, consists, wholly or partly, of that increase in value, irrespective of the nature of that increase. The interest to be taken into consideration in such circumstances is the difference, paid by the paying agent on redemption, between the capital reimbursed and the issue price of the corresponding securities; in the event of repurchase before maturity by a person not subject to the application of this Directive, the repurchase price shall replace value at redemption;(Amendment 8)Article 5(c)>Original text>(c) income distributed by undertakings for collective investment in transferable securities within the meaning of Council Directive 85/611/EEC(1) which invest directly or indirectly more than 50% of their assets in debt-claims or corresponding securities;_____________________(1) OJ L 375, 31.12.1985, p. 3.>Text following EP vote>(c)income distributed by undertakings for collective investment in transferable securities which invest, on yearly average, directly or indirectly more than 50% of their assets in debt-claims or corresponding securities;(Amendment 10)Article 11, 2nd paragraph (new)>Original text>>Text following EP vote>An agreement shall first be reached with those neighbouring countries which grant non-residents a particularly favourable tax treatment which is liable to undermine the effectiveness of this Directive; it shall gradually be extended to at least all OECD member countries.Legislative resolution embodying Parliament's opinion on the proposal for a Council Directive to ensure a minimum of effective taxation of savings income in the form of interest payments within the Community(COM(98)0295 - C4-0404/98 - 98/0193(CNS))(Consultation procedure)The European Parliament,- having regard to the Commission proposal to the Council, COM(98)0295 - 98/0193(CNS) ((OJ C 212, 8.7.1998, p. 13.)),- having been consulted by the Council pursuant to Article 100 of the EC Treaty (C4-0404/98),- having regard to Rule 58 of its Rules of Procedure,- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy (A4-0040/99),1. Approves the Commission proposal, subject to Parliament's amendments;2. Calls on the Commission to alter its proposal accordingly, pursuant to Article 189a(2) of the EC Treaty;3. Calls on the Council to notify Parliament should it intend to depart from the text approved by Parliament;4. Calls for the conciliation procedure to be opened should the Council intend to depart from the text approved by Parliament;5. Asks to be consulted again should the Council intend to make substantial modifications to the Commission proposal;6. Instructs its President to forward this opinion to the Council and Commission.