Corrigendum to Council Directive 2004/76/EC of 29 April 2004 amending Directive 2003/49/EC as regards the possibility for certain Member States to apply transitional periods for the application of a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States (OJ L 157, 30.4.2004)
Date: 2004-06-02
Institutions: Council of the European Union
Subjects: EU Member State, group of companies, interest, savings, tax, tax on income, tax system, transitional period (EU)

2.6.2004

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Official Journal of the European Union

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Corrigendum to Council Directive 2004/76/EC of 29 April 2004 amending Directive 2003/49/EC as regards
the possibility for certain Member States to apply transitional periods for the application of a common system
of taxation applicable to interest and royalty payments made between associated companies of different
Member States

(Official Journal of the European Union L 157 of 30 April 2004)

Directive 2004/76/EC should read as follows:

COUNCIL DIRECTIVE 2004/76/EC
of 29 April 2004
amending Directive 2003/49/EC as regards the possibility for certain Member States to apply
transitional periods for the application of a common system of taxation applicable to interest and
royalty payments made between associated companies of different Member States

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Commu-
nity, and in particular Article 94 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Having regard to the opinion of the European Economic and
Social Committee (2),

(4)

(5)

(6)

Whereas:

(1)

(2)

(3)

Council Directive 2003/49/EC of 3 June 2003 on the com-
mon system of taxation applicable to interest and royalty
payments made between associated companies of different
Member States (3) provides for the abolition of taxation on
those payments in the Member State where they arise, but
also ensures that these payments are subject to tax once in
a Member State.

The application of Directive 2003/49/EC is liable to cause
budgetary difficulties for the Czech Republic, Latvia,
Lithuania, Poland and Slovakia given the rates of withhold-
ing tax applied under national law and on the basis of tax
conventions on income and capital and the revenue thus
collected.

Those acceding States should therefore be permitted, on a
temporary basis, until the date of application referred to in
Article 17(2) and (3) of Council Directive 2003/48/EC of
3 June 2003 on taxation of savings income in the form of
interest payments (4) not to apply certain provisions of
Directive 2003/49/EC concerning, in the case of Latvia and
Lithuania, interest and royalty payments, and in the case of
the Czech Republic, Poland and Slovakia, royalty payments
only.

The measure provided for in this Directive is not an adap-
tation within the meaning of Article 57 of the 2003 Act of
Accession.

Since the Member States are required to grant credit for tax
deducted from interest and royalty payments, it is neces-
sary to ensure that this Directive is transposed by the date
of entry into force of the 2003 Act of Accession.

The provisions in this Directive must apply from the date
of accession of the new Member States. The urgency of the
matter justifies an exception to the six-week period pro-
vided for in point I.3. of the Protocol on the role of national
parliaments in the European Union,

HAS ADOPTED THIS DIRECTIVE:

Article 1

Article 6 of Directive 2003/49/EC is hereby amended as follows:

1. The title is replaced by the following:

‘Transitional rules for the Czech Republic, Greece,
Spain, Latvia, Lithuania, Poland, Portugal and Slovakia’

.

2.

Paragraphs 1, 2 and 3 are replaced by the following:

(1) Opinion of 21 April 2004 (not yet published in the Official Journal).
(2) Opinion of 28 April 2004 (not yet published In the Official Journal).
(3) OJ L 157, 26.6.2003, p. 49.
(4) OJ L 157, 26.6.2003, p. 38.

‘1.
Greece, Latvia, Poland and Portugal shall be authorised
not to apply the provisions of Article 1 until the date of
application referred to in Article 17(2) and (3) of Council
Directive 2003/48/EC of 3 June 2003 on taxation of savings

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Official Journal of the European Union

2.6.2004

income in the form of interest payments (*). During a transi-
tional period of eight years starting on the aforementioned
date, the rate of tax on payments of interest or royalties made
to an associated company of another Member State or to a
permanent establishment situated in another Member State
of an associated company of a Member State must not exceed
10 % during the first four years and 5 % during the final four
years.

— receives royalties from an associated company of the

Czech Republic, Spain or Slovakia,

— receives interest or royalties from a permanent establish-
ment situated in Greece, Latvia, Lithuania, Poland or Por-
tugal, of an associated company of a Member State,

Lithuania shall be authorised not to apply the provisions of
Article 1 until
the date of application referred to in
Article 17(2) and (3) of Directive 2003/48/EC. During a tran-
sitional period of six years starting on the aforementioned
date, the rate of tax on payments of royalties made to an
associated company of another Member State or to a perma-
nent establishment situated in another Member State of an
associated company of a Member State must not exceed
10 %. During the first four years of the six-year transitional
period, the rate of tax on payments of interest made to an
associated company of another Member State or to a perma-
nent establishment situated in another Member State must
not exceed 10 %; and for the following two years, the rate of
tax on such payments of interest must not exceed 5 %.

Spain and the Czech Republic shall be authorised, for royalty
payments only, not to apply the provisions of Article 1 until
the date of application referred to in Article 17(2) and (3) of
Directive 2003/48/EC. During a transitional period of six
years starting on the aforementioned date, the rate of tax on
payments of royalties made to an associated company of
another Member State or to a permanent establishment situ-
ated in another Member State of an associated company of a
Member State must not exceed 10 %. Slovakia shall be autho-
rised, for royalty payments only, not to apply the provisions
of Article 1 during a transitional period of two years starting
on 1 May 2004.

These transitional rules shall, however, remain subject to the
continued application of any rate of tax lower than those
referred to in the first, second and third subparagraphs pro-
vided by bilateral agreements concluded between the Czech
Republic, Greece, Spain, Latvia, Lithuania, Poland, Portugal
or Slovakia and other Member States. Before the end of any
of the transitional periods mentioned in this paragraph the
Council may decide unanimously, on a proposal from the
Commission, on a possible extension of the said transitional
periods.

2. Where a company of a Member State, or a permanent
establishment situated in that Member State of a company of
a Member State:

— receives interest or royalties from an associated com-
pany of Greece, Latvia, Lithuania, Poland or Portugal,

or

— receives royalties from a permanent establishment situ-
ated in the Czech Republic, Spain or Slovakia, of an
associated company of a Member State,

the first Member State shall allow an amount equal to the tax
paid in the Czech Republic, Greece, Spain, Latvia, Lithuania,
Poland, Portugal, or Slovakia in accordance with paragraph
1 on that income as a deduction from the tax on the income
of the company or permanent establishment which received
that income.

The deduction provided for in paragraph 2 need not

3.
exceed the lower of:

(a)

the tax payable in the Czech Republic, Greece, Spain,
Latvia, Lithuania, Poland, Portugal or Slovakia, on such
income on the basis of paragraph 1,

or

(b)

that part of the tax on the income of the company or
permanent establishment which received the interest or
royalties, as computed before the deduction is given,
which is attributable to those payments under the
domestic law of the Member State of which it is a com-
pany or in which the permanent establishment
is
situated.

(*) OJ L 157, 26.6.2003, p. 38.’

Article 2

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive from the date of its entry into force. They shall imme-
diately forward to the Commission the text of these measures,
together with a correlation table between such measures and this
Directive.

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When Member States adopt such measures, they shall contain a
reference to this Directive or be accompanied by such a reference
on the occasion of their official publication. Member States shall
determine how such reference is to be made.

2. Member States shall communicate to the Commission the
text of the main provisions of national law which they adopt in
the field covered by this Directive.

Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta,
Poland, Slovenia and Slovakia.

Article 4

This Directive is addressed to the Member States.

Article 3

Done at Luxembourg, 29 April 2004.

This Directive shall enter into force subject to, and as on the date
of, the entry into force of the Treaty of Accession of the Czech

For the Council
The President
M. McDOWELL