Opinion of the European Economic and Social Committee on the ‘proposal for a Council Directive amending Directive 2003/49/EC on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States’ (COM(2003) 841 final – 2003/0331 (CNS))
Date: 2004-04-01
Institutions: European Economic and Social Committee
Subjects: European cooperative, corporation tax, group of companies, tax harmonisation

30.4.2004

EN

Official Journal of the European Union

C 112/113

Opinion of the European Economic and Social Committee on the ‘proposal for a Council Directive
amending Directive 2003/49/EC on a common system of taxation applicable to interest and royalty
payments made between associated companies of different Member States’

(COM(2003) 841 final – 2003/0331 (CNS))

(2004/C 112/28)

On 2 February 2004, the Commission decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Committee decided to instruct the Section for Economic and Monetary Union and Economic and
Social Cohesion to undertake the preparatory work.

In view of the urgent nature of the work, the Committee decided at its 407th plenary session of 1 April
2004 to appoint Mr Burani as rapporteur-general and adopted the following opinion unanimously:

1.

Introduction

able in the case of parent companies and subsidiaries (1);

1.1 On 3 June 2003, the Economic and Financial Affairs
Council adopted Directive 2003/49/EC on a common system
of taxation applicable to interest and royalty payments made
between associated companies of different Member States, as
part of the so-called Tax Package. When the directive was
adopted, the Council stipulated in a statement for entry in the
minutes that ‘the benefits of the … Directive should not accrue
to companies that are exempt from tax on income covered by
this Directive’, and authorised the Commission to take the
appropriate precautionary measures.

1.2 Moreover, the Commission had already specified that ‘it
is necessary to ensure that interest and royalty payments are
subject to tax once in a Member State’. In short, the directive, as
supplemented by the amendments now being proposed, seeks
to prevent loopholes in the legislation which provide opportu-
interest and royalties
nities for tax evasion in the case of
payments between associated companies of different Member
States.

To place this proposal in context, it should be remem-
1.3
bered that the Commission has already presented two proposals
identifying possible remedies to the restrictions imposed by
direct taxation on cross-border economic activities in the single
market:

— the second proposal, amending Directive 90/434/EEC of 23
July 1990, concerns the common system of taxation applic-
able to mergers, divisions, transfers of assets and exchanges
of
shares concerning companies of different Member
States (2).

The introduction to the proposal states (although this is
1.4
obvious) that the European Company, whose Statute will enter
into force on 8 October 2004, is henceforth to be included in
the list of companies which will be covered by the directive.

1.5
European cooperatives, which will be able to receive the
benefits of the new legal Statute for a European Cooperative
Society (SCE) from 2006 onwards, will also be covered by the
directive: they will receive the same treatment as cooperatives
in the Member State of their registered office.

2. Comments

2.1
Article 1(1) of the proposal amends the corresponding
introducing a proviso
Article 1(1) of the existing directive,
which was not there before: interest and royalties paid to an
associated company are to be exempt from tax if they are subject
to tax in the Member State in which the receiving company is situ-
ated. The EESC endorses this, but wonders whether the need to
monitor compliance with this condition might place an exces-
sive burden on the tax authorities of the source state, which
will be required to verify whether the beneficial owner is effec-
tively subject to tax and whether it has fulfilled its tax obliga-
tions.

— the first proposal, amending Directive 90/435/EEC of 23
July 1990, concerns the common system of taxation applic

(1) EESC opinion, OJ C 32 of 5.2.2004, p. 118.
(2) EESC opinion CESE 312/2004 of 25.2.2004.

C 112/114

EN

Official Journal of the European Union

30.4.2004

2.2
Article 1(2) replaces the annex to the existing directive,
which briefly listed the different types of companies in the
language of each country, with a much more detailed list
which includes the European Company (SE) and the European
Cooperative Society (SCE) as well. This list has the merit of
being clearer and of removing some ambiguity where certain
countries are concerned but, apart
from these necessary
improvements, it does not essentially add anything new.

2.3
Article 2 contains the implementing provisions. The
Member States are to comply with the directive by 31
December 2004, bringing into force all the laws, regulations
and administrative provisions necessary;
they are also to
forward to the Commission the text of the provisions and a
correlation table between the provisions and the directive. The
EESC points out that, in view of the amount of time required,

Brussels, 1 April 2004

particularly in certain Member States, for Community provi-
sions to be translated into national legislation, the deadline set
would seem to be rather short. Given that the directive is to
enter into force in all Member States simultaneously, it may be
that the deadline needs to be extended by six months or more.

3. Conclusions

3.1
The EESC fully endorses the aim of the directive, which
is part of a process of gradual fine-tuning of taxation provisions
intended to avoid both tax evasion and double taxation. The
directive should also indirectly facilitate harmonisation of taxa-
tion systems in the future and help to eliminate distortion of
competition, which is currently all too apparent.

The President

of the European Economic and Social Committee

Roger BRIESCH

Opinion of the European Economic and Social Committee on the ‘proposal for a Council Regu-
lation on actions in the field of beekeeping’

(COM(2004) 30 final - 2004/0003 (CNS))

(2004/C 112/29)

On 30 January 2004, the Council decided to consult the European Economic and Social Committee, under
Article 37 of the Treaty establishing the European Community, on the above-mentioned proposal

On 24 February 2004, the Bureau of the European Economic and Social Committee decided to instruct the
Section for Agriculture, Rural Development and the Environment to undertake the preparatory work.

In view of the urgent nature of the work, the European Economic and Social Committee decided at its
407th plenary session of 31 March and 1 April 2004 (meeting of 1 April) to appoint Mr Joan Caball i
Subirana as rapporteur-general and adopted the following opinion unanimously.

1.

Introduction

1.1
Following its 1994 Communication on European apicul-
ture (1), the Commission proposed a Regulation laying down
general rules for the application of measures to improve the
production and marketing of honey, which was adopted by the
Council in June 1997 (Reg. (EC) No. 1221/97) (2).

In November 1997, the Commission issued Regulation
1.2
(EC) No. 2300/97 (3) laying down the rules for implementing
the Regulation 1221/97 and in June 2001, in line with Article
6 of Regulation (EC) No. 1221/97, the Commission presented

(1) COM(94) 256 final
(2) OJ L 173 of 1.7.1997, p. 1. Regulation as amended by Regulation

(EC) No 2070/98 (OJ L 265 of 30.9.1998, p. 1).

(3) OJ L 319 of 21.11.1997

its first three-yearly report on the application of this Regulation
in the Member States.
the Commission
In this
concluded that the Regulation had been applied satisfactorily
and therefore recommended leaving it unchanged.

report,

1.3
In January 2004, the Commission presented its second
assessment report on the application of national programmes
in the Member States in which it proposes adopting a new
regulation with a view to adapting the beekeeping sector's
objectives to the current situation in the Community.