Proposal for a COUNCIL DIRECTIVE on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States
Date: 2011-11-11
Institutions: European Commission
Subjects: EU Member State, corporation tax, deduction at source, double taxation, firm governed by commercial law, interest, transnational corporation

EUROPEAN COMMISSION 

Brussels, 11.11.2011 
COM(2011) 714 final 

2011/0314 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

on a common system of taxation applicable to interest and royalty payments made 
between associated companies of different Member States 

(recast) 
{SEC(2011) 1332 final} 
{SEC(2011) 1333 final}

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Council  Directive  2003/49/EC1  (‘the  Directive’)  regulates  the  common  system  of  taxation 
applicable  to  interest  and  royalty  payments  between  associated  companies  of  different 
Member  States.  Since  it  has  been  amended  several  times,  this  proposal  recasts  it  in  the 
interests  of  clarity.  The  explanatory  memorandum  states  the  reasons  for  each  proposed 
substantive amendment and specifies which provisions of the earlier act remain unchanged. 

The problems addressed by the Directive arise from the existence of particular corporate tax 
obstacles to the functioning of the internal market: cross-border interest and royalty payments 
are  subject  to  heavier  taxation  than  domestic  transactions.  In  the  case  of  purely  domestic 
operations, the recipient of the payment is subject to corporate tax as a resident taxpayer in 
the Member State where it is resident for tax purposes. In case of international payments, they 
may  be  also  subject  to  withholding  taxes  in  the  source  Member  State.  The  purpose  of  the 
Directive  is  to  put  cross-border  interest  and  royalty  payments  on  an  equal  footing  with 
domestic  payments,  by  eliminating  juridical  double  taxation,  burdensome  administrative 
formalities and cash-flow problems for the companies concerned. 

The Commission and international tax stakeholders have always been convinced of the need 
for an EU instrument in this area, as neither unilateral measures taken by Member States nor 
bilateral  tax  agreements  have  provided  a  satisfactory  solution  that  fully  meets  the 
requirements  of  the  internal  market.  Bilateral  tax  treaties  do  not  cover  all  bilateral  relations 
between  Member  States,  they  do  not  completely  abolish  double  taxation  and,  in  particular, 
they  never  provide  a  uniform  solution  for  triangular  and  multilateral  relations  between 
Member States. 

In  its  Communication  of  5  November  1997  entitled  ‘A  package  to  tackle  harmful  tax 
competition in the European Union’2 the Commission stressed the need for coordinated action 
at European level to tackle harmful tax competition in order to help achieve certain objectives 
such as reducing the continuing distortions in the internal market, preventing excessive losses 
of tax revenue and encouraging tax structures to develop in a more employment-friendly way. 
The Ecofin Council meeting of 1 December 1997 held a wide-ranging debate on the basis of 
that Communication and decided, among other initiatives, to ask the Commission to present a 
proposal  to  harmonise  the  taxation  of  cross-border  interest  and  royalty  payments3.  On  4 
March  1998,  the  Commission  adopted  a  proposal  for  a  Council  Directive  on  a  common 
system  of  taxation  applicable  to  interest  and  royalty  payments  made  between  associated 
companies  of  different  Member  States,  COM(1998)  67  final.  On  3  June  2003  the  Ecofin 
Council  adopted  the  Directive.  In  order  to  alleviate  its  budgetary  impact  for  those  Member 
States which were net importers of capital and technology and for which these taxes on such 
payments  represented  an  appreciable  source  of  revenue,  a  gradual  approach  seemed 
appropriate as far as the scope of the Directive was concerned. 

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3 

Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty 
payments made between associated companies of different Member States (OJ L 157, 26.6.2003, p. 49). 
COM (1997) 564 final of 5.11.1997. 
OJ C 2, 6.1.1998. 

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The  Directive  was  first  amended  in  2004  by  Directives  2004/664  and  2004/765  due  to  the 
accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, 
Slovenia  and  Slovakia.  The  former  introduced  in  the  text  of  the  Directive  the  taxes  and 
companies from these new Member States to which it applies. The latter amended the text of 
Article  6  of  the  Directive  to  introduce  transitional  arrangements  for  the  Czech  Republic, 
Latvia, Lithuania, Poland and Slovakia. 

Later, Council Directive 2006/98/EC6 included the reference to the taxes and companies from 
Bulgaria and Romania to which the Directive applies. Annexes IV.6 and VII.7 to the Act of 
Accession of Bulgaria and Romania included temporary derogations7.  

Article 8 of the Directive required the Commission to report to the Council on the operation 
of  the  Directive,  in  particular  with  a  view  to  extending  its  coverage  to  companies  or 
undertakings other than those under its scope. In order to obtain the information required to 
draft the report, DG TAXUD asked the International Bureau of Fiscal Documentation to carry 
out  a  survey  of  the  implementation  of  the  Directive.  The  Commission’s  report  on  the 
functioning  of  the  Directive  was  presented  on  23  April  20098.  It  indicates  that  overall 
implementation  of  the  Directive  has  been  satisfactory  and  refers  to  possible  amendments  in 
order to extend its coverage.  

This  recast  tries  to  solve  some  of  the  problems  resulting  from  the  limited  scope  of  the 
Directive.  There  are  cross-border  payments  outside  its  scope  that  face  withholding  taxes  at 
source. Thus, it proposes to extend the list of companies to which the Directive applies and to 
reduce  the  shareholding  requirements  to  be  met  for  companies  to  qualify  as  associated.  In 
addition, it adds a new requirement for the tax exemption: the recipient has to be subject to 
corporate tax in the Member State of its establishment on the income derived from the interest 
or royalty payment. This condition seeks to ensure that the tax relief is not granted when the 
corresponding income is not subject to tax and thus close a loophole that could be used by tax 
evaders. Finally, a technical amendment is proposed to avoid situations where payments made 

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8 

Council  Directive  2004/66/EC  of  26  April  2004  adapting  Directives  1999/45/EC,  2002/83/EC, 
2003/37/EC  and  2003/59/EC  of  the  European  Parliament  and  of  the  Council  and  Council  Directives 
77/388/EEC, 91/414/EEC,  96/26/EC, 2003/48/EC  and 2003/49/EC,  in  the  fields of free  movement  of 
goods,  freedom  to  provide  services,  agriculture,  transport  policy  and  taxation,  by  reason  of  the 
accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia 
and Slovakia (OJ L 168, 1.5.2004, p. 35). 
Council  Directive  2004/76/ECof 29.4.2004  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, p. 106). 
Council Directive 2006/98/EC of 20 November 2006 adapting certain Directives in the field of taxation, 
by reason of the accession of Bulgaria and Romania (OJ L 363, 20.12.2006, p. 129). 
Treaty between the Kingdom of Belgium, the Czech Republic, the Kingdom of Denmark, the Federal 
Republic  of  Germany,  the  Republic  of  Estonia,  the  Hellenic  Republic,  the  Kingdom  of  Spain,  the 
French  Republic,  Ireland,  the  Italian  Republic,  the  Republic  of  Cyprus,  the  Republic  of  Latvia,  the 
Republic  of  Lithuania,  the  Grand  Duchy  of  Luxembourg,  the  Republic  of  Hungary,  the  Republic  of 
Malta, the Kingdom of the Netherlands, the Republic of Austria, the Republic of Poland, the Portuguese 
Republic,  the  Republic  of  Slovenia,  the  Slovak  Republic,  the  Republic  of  Finland,  the  Kingdom  of 
Sweden, the United Kingdom of Great Britain and Northern Ireland (Member States of the European 
Union)  and  the  Republic  of  Bulgaria  and  Romania,  concerning  the  accession  of  the  Republic  of 
Bulgaria and Romania to the European Union (OJ L 157, 21.6.2005, p. 278 and p. 311). 
COM (2009) 179 final. 

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by a permanent establishment and deriving from its activities are denied the exemption on the 
grounds that they do not constitute a tax-deductible expense. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

A public consultation on possible amendments to the Directive ran from 24 August until 31 
October  2010  on  the  ‘Your  Voice  in  Europe’  web  portal  and  DG  TAXUD’  website.  71 
responses  were  received  from  various  stakeholders,  including  multinationals  (25  replies), 
large  firms  (3  replies),  business  and  industry  associations  (18  replies),  tax  practitioners  (16 
replies), professional associations (8 replies) and one civil servant from a Member State. The 
first conclusion from the replies received confirms the interest in the initiatives raised by the 
Commission. There is a clear tendency in support of the need to take action and amend the 
Directive.  Only  7  %  of  the  replies  do  not  consider  it  necessary  to  update  the  list  of  entities 
covered by the Directive and 4 % do not agree with the change in the shareholding threshold 
for  entities  to  be  considered  as  associated.  The  majority  of  respondents  also  showed 
preference  for  the  alignment  of  the  personal  scope  of  the  Directive  with  that  of  the  Parent-
Subsidiary Directive (supported by 9 0% of responses); amending the Directive to allow the 
computation  of  indirect  holdings  to  establish  that  companies  are  associated  was  favourably 
received  by  9  1%  of  the  contributors;  lowering  the  threshold  requirement  to  consider 
companies as associated from a 25% holding to 10% was viewed positively by 87 % of the 
replies. 

The  Commission’s  impact  assessment  referred  to  the  problems  deriving  from  withholding 
taxes  on  cross-border  interest  and  royalty  payments:  economic  distortions  in  business 
behaviour; compliance costs due to paperwork and delays in making tax relief effective; and 
the risk of double taxation. Several alternatives were considered. Not taking any policy action 
was  rejected  since  the  difficulties  identified  would  continue  distorting  the  process  of  cross-
border  allocation  of  resources.  Extending  the  Directive’s  benefits  to  all  payments  between 
unrelated  undertakings  would  be  effective  in  reducing  the  negative  consequences  described 
but would be less efficient and inconsistent with other aims to improve the functioning of the 
Directive: the different taxation of dividends, interest and royalties would continue so that the 
corresponding economic distortions would remain; it would also involve steeper reductions in 
Member States’ tax revenues; and its implementation would be more difficult since there is no 
experience  in  harmonising  cross-border  payments  between  non-associated  companies. 
Another alternative would be aligning the Directive’s requirements with those of the Parent-
Subsidiary  Directive9  on  dividend  taxation.  This  is  the  option  chosen  by  this  recast  since  it 
offers a more balanced result: it is more effective in reducing economic distortions and does 
not diminish Member States’ tax revenue as much as the previous option, an important fact in 
the  current  context  of  public  finances.  Concerning  interest  payments,  the  loss  should  not 
exceed  € 200  to  € 300  million  and  would  affect  the  13  EU  Member  States  that  still  apply 
withholding  taxes  to  outgoing  interest  payments  –  Belgium,  Bulgaria,  the  Czech  Republic, 
Greece,  Hungary,  Ireland,  Italy,  Latvia,  Poland,  Portugal,  Romania,  Slovenia  and  United 
Kingdom  -;  concerning  royalty  payments,  the  loss  should  not  exceed  € 100  to  € 200  million 

9 

Council Directive 90/435/CEE on the common tax regime applicable in the case of parent companies 
and  subsidiaries  of  different  Member  States  OJ  L  225,  20.8.1990,  p.  6,  as  amended  by  Council 
Directive 2003/123/EC of 22 December 2003 amending Directive 90/435/EEC on the common system 
of taxation applicable in the case of parent companies and subsidiaries of different Member States, OJ L 
7, 13.1.2004, p. 41. 

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and would affect the seven countries with the largest negative royalty balances as a share of 
GDP  -  Bulgaria,  the  Czech  Republic,  Greece,  Poland,  Portugal,  Romania  and  Slovakia  As 
mentioned, it is the option preferred by stakeholders responding to the public consultation. 

Excluding payments from the Directive’s benefits when the income is not subject to taxation 
by the Member State of the recipient as well as the technical amendment to avoid situations 
where  payments  made  by  a  permanent  establishment  and  deriving  from  its  activities  are 
denied the exemption on the grounds that they do not constitute a tax-deductible expense, are 
measures of a purely technical nature whose impact cannot be measured. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

Subsidiarity principle 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the  exclusive 
competence  of  the  European  Union.  The  objectives  of  the  proposal  cannot  be  sufficiently 
achieved  by  the  Member  States.  Withholding  rates  are  fixed  by  each  Member  State  in  its 
national law according to its corresponding tax policy options. These charges may be reduced 
or waived under bilateral double taxation conventions. However, each particular convention 
fixes it own rate as a result of the trade-off between the two States agreeing it. The outcome is 
that  withholding  taxes  vary  according  to  each  bilateral  relationship  between  the  Member 
States and there will not be spontaneous coordinated action by the Member States. 

The  second  aspect  to  be  considered  is  whether  and  how  the  objectives  could  be  better 
achieved by action on the part of the EU. The rationale for European action stems from the 
cross-border nature of the problem. Clearly, action at EU level will guarantee harmonised and 
coordinated tax policies in this particular area of taxation. Member States would be bound by 
the exemption of withholding taxes to the same extent. 

Proportionality principle 

The  amendments  proposed  in  this  recast  should  be  proportionate.  On  the  basis  of  the 
problems detected, they should offer solutions likely to meet the objectives fixed. The main 
cause of economic distortions, compliance costs and the risk of excessive or double taxation 
is the existence of taxes levied at source; also, the disparities in taxation of the different types 
of  cross-border  capital  flows  distort  business  behaviour.  The  amendments  proposed  in  this 
recast aim to extend the Directive’s scope and apply the tax exemption in a wider number of 
cases. This solution will contribute to achieving tax neutrality, reducing compliance costs and 
eliminating the risk of double taxation in a larger number of cases so that economic operators 
can allocate resources more efficiently. The initiative does not go beyond what is necessary to 
achieve these objectives and leaves Member States scope for national decisions since it limits 
its effects to EU cross-border payments. 

The proposal therefore complies with the proportionality principle. 

Simplification 

As mentioned above, the rules establishing the tax regime for cross-border interest and royalty 
payments  are  laid  down  in  the  four  Directives  and  two  annexes  to  the  Act  of  Accession  of 
Bulgaria and Romania; there is no consolidated text. This situation results in legal complexity 
for those needing to consult the legislation in force. Gathering existing legislation in a single 

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act  will  simplify,  clarify  and  facilitate  the  application  of  harmonised  law  by  businesses  and 
professionals dealing with these matters. 

The  assessment  of  source  taxation  and  the  refund  procedures  to  implement  the  tax  relief 
provided  for  in  domestic  laws  or  in  double  taxation  conventions  result  in  high  compliance 
costs. Paperwork is required to attest the right to apply the relief from double taxation or to 
credit the amount of foreign tax paid and reduce accordingly the corporate tax charged in the 
State  of  residence.  In  addition,  firms  are  required  to  withhold  taxes  and  are  subsequently 
reimbursed  if  the  tax  administration  deems  that  they  qualify  for  the  treaty  exemption  or 
reduction. Also, when withholding tax rates are matched by tax credits in the home country, 
the  withholding  is  levied  on  the  payment  while  its  reduction  in  the  residence  State  is  only 
possible  later  when  the  tax  return  is  submitted.  The  result  is  that  businesses  incur  liquidity 
costs. According to the impact assessment, the initiatives contained in this recast proposal to 
eliminate withholding taxes in a larger number of cases would entail compliance cost savings 
estimated at between € 38,4 and € 58,8 million. 

Commentary on the Articles 

•  Tax exemption 

Article 1 (1) is amended. Its purpose is to exempt payments of interest and royalties from any 
taxation  at  source.  The  ‘Statements  for  entry  in  the  minutes  of  the  Council’,  when  the 
Directive  was  adopted,  contained  the  following  passage:  ‘The  Council  and  the  Commission 
agree that the benefits of the Interest and Royalty Directive should not accrue to companies 
that  are  exempt  from  tax  on  income  covered  by  this  Directive.  The  Council  invites  the 
Commission to propose any necessary amendments to this Directive in due time’. The recitals 
to  the  Directive  state  that  ‘it  is  necessary  to  ensure  that  interest  and  royalty  payments  are 
subject  to  tax  once  in  a  Member  State’10.  The  Commission  shares  the  Council’s  view  that 
there  should  be  no  loopholes  in  the  Directive  allowing  the  taxation  of  interest  and  royalty 
payments to be circumvented. To this end, it adopted a proposal in 200311 which was close to 
an agreement in the Ecofin Council. The Commission withdrew that proposal because it was 
due to put forward this recast of the Directive, as planned in Annex II to the Commission’s 
Work Programme 201012. Thus, the recast amends Article 1 (1) in order to make it clear that 
Member States have to grant the benefits of the Directive only where the interest or royalty 
payment concerned is not exempt from corporate taxation in the hands of the beneficial owner 
in  the  Member  State  where  it  is  established.  In  particular  this  addresses  the  situation  of  a 
company or a permanent establishment paying income tax but  benefiting  from  a  special  tax 
scheme exempting foreign interest or royalty payments received. The source State would not 
be obliged to exempt it from withholding tax under the Directive in such cases. 

•  Definition of source State 

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Recital 3 of the Directive. 
Proposal  for  a  Council  Directive  on  a  common  system  of  taxation  applicable  to  interest  and  royalty 
payments made between associated companies of different Member States, COM (2003) 841. 
Communication  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social 
Committee  and  the  Committee  of  the  Regions,  Commission  Work  Programme  2010  -  Time  to  act, 
COM (2010) 135 final. 

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Article 1 (2) which identifies the source State as the Member State from where the payments 
are made remains unchanged. 

For  the  purposes  of  this  definition,  Article  1  (3)  clarifies  that  a  permanent  establishment  is 
considered  to  be  making  a  payment  when  it  represents  a  tax-deductible  expense.  The 
Commission’s  report  on  the  Directive  mentioned  that  it  is  clear  from  the  context  that  the 
purpose  of  the  ‘tax-deductibility’  requirement  is  to  ensure  that  the  benefits  of  the  Directive 
accrue only in respect of those payments that represent expenses which are attributable to the 
permanent establishment. However, in its current wording the provision would also apply to 
cases where deduction is denied on other grounds. The recast amends this paragraph to make 
it clear that the Directive applies when the payment is linked to the activities carried out by 
the permanent establishment. 

•  Definition of beneficial owner 

The beneficial owner is identified in paragraphs 4 and 5 of Article 1, which are not amended. 

•  Payments made or received by permanent establishments 

Article 1 (6), governing the cases where payments are made or received through permanent 
establishments, is not amended. 

•  Requirement of association 

Paragraphs  7  and  10  of  Article  1,  which  refer  to  the  conditions  of  association  between  the 
companies involved in the transaction giving rise to the payment, are not amended. 

•  Territorial scope 

Article  1  (8),  providing  that  the  Directive  only  applies  to  intra-EU  payments,  remains 
unchanged. 

•  Taxation in the Member State of the recipient 

Article  1  (9),  referring  to  the  taxing  rights  of  the  Member  State  of  the  recipient,  is  not 
amended. 

•  Attestation procedure 

Paragraphs 11, 12, 13 and 14 of Article 1, on the procedure to attest the right to the exemption 
are not amended. 

•  Refund procedure 

Paragraphs  15  and  16  of  Article  1  which  set  out  the  procedure  to  refund  the  tax  withheld 
when the company has the right to the exemption, are not amended. 

•  Definition of interest and royalties 

The definitions of interest and royalties set out in Article 2 remain invariable. This Article is 
merged  with  Article  3  which  also  contained  definitions  relevant  for  the  application  of  the 
Directive. 

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•  Definition of company 

In  accordance  with  Article  3  (a),  now  Article  2  (c),  the  Directive  covers  companies  of  a 
Member State that take one of the forms listed in Annex I, are resident in a Member State and 
are  subject  to  one  of  the  types  of  income  tax  listed  in  the  Directive.  The  list  of  entities  to 
which it applies is made by reference to national company laws and is included in Annex I. 

This recast modifies the personal coverage of the Directive with a view to extending it to the 
largest possible number of entities. To that end, two criteria have been followed. 

In the first place, the list of entities to which the Directive applies is currently narrower than 
the  list  annexed  to  the  Parent-Subsidiary  Directive.  This  latter  Directive  applies  to  profit 
distributions  and  pursues  the  same  aim  as  the  Directive,  namely  to  eliminate  withholding 
taxes and the risk of double taxation in the case of cross-border capital flows: the Directive 
covers interest and royalty payments and the Parent-Subsidiary Directive relates to dividend 
payments. The amendment to the Directive extends its list with a view to bringing it into line 
with  that  of  the  Parent-Subsidiary  Directive.  This  solution  will  help  make  taxation  more 
neutral. 

One of the results of this amendment will be the inclusion of the European Company (SE) and 
of the European Cooperative Society (SCE) in the list of companies covered by the Directive. 
The  aims  pursued  with  these  two  European  legal  types  -  creation  and  management  of 
companies with a European dimension, free from the obstacles arising from the disparity and 
the limited territorial application of national law – will be furthered13. Thus, the SE will give 
companies  operating  in  more  than  one  Member  State  the  option  of  being  established  as  a 
single company under EU law and thus being able to operate throughout the EU with one set 
of company law  rules  and a unified management  and  reporting  systems.  While  there  are  no 
provisions in the SE Statute directed specifically at taxation, nevertheless, the instrument does 
require the SE to be subject to ‘the provisions of Member States’ law which would apply to a 
public-limited company formed in accordance with the law of the Member State in which the 
SE has its registered office’14. Such public-limited companies, which are listed in the annex to 
the  SE  Statute,  are  also  included  in  the  list  of  companies  Annex  to  the  Directive.  So,  in 
practice the SE already enjoys the benefits of the Directive because the Member State where it 
has  its  registered  office  is  required  to  grant  the  same  benefits  as  those  which  apply  to  the 
respective  national  type  of  public-limited  company.  However,  both  for  the  purposes  of 
clarification  and  to  underpin  the  importance  that  the  Commission  attaches  to  it,  the 
Commission proposes that the SE be specifically mentioned in the list of companies annexed 
to the Directive15. 

Similarly, the SCE Statue does not have specific provisions on taxation16, so that the tax laws 
of the Member States and of the EU apply. The Commission considers it essential to support 

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16 

Council Regulation (EC) N° 2157/2001 of 8 October 2001 on the Statute for a European company – see 
paragraph 7 of  the  explanatory  memorandum  –  (OJ  L  294, 10.11.2001,  p.  1)  and  Council  Regulation 
(EC) N° 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society – see paragraph 
6 of the explanatory memorandum – (OJ L 207, 18.8.2003, p. 1). 
Article 9 1. (c) II of the Council Regulation EC) n° 2157/2001 of 8 October 2001. 
The same approach is followed in the proposals to amend the Parent-Subsidiary Directive (90/434/EEC) 
and the Merger Directive 90/435/EEC, where the European Company is explicitly included in the list of 
companies covered by the Directives. 
Recital 16 of the SCE Statute. 

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this new type of company and to provide the framework to allow businesses to make the best 
use  of  this  legal  form.  The  SCE  will  receive  the  same  treatment  as  cooperatives  in  the 
Member State of their registered office and therefore, indirectly, the benefits of the Directive 
provided  for  those  national  types  already  covered  by  it.  While  some  of  them  are  already 
included in the list annexed to the Directive, it is proposed that more of such cooperatives be 
included  the  new  Annex.  In  these  circumstances  the  Commission  proposes  that  the  SCE  be 
also included in the list of companies. Although, as in the case of the SE, the inclusion is seen 
more as a signal underlining the importance that the Commission assigns to the SCE, and to 
avoid any uncertainty or doubt, this measure ensures that the SCE will enjoy the full benefits 
of the Directive. 

In the second place, there are some national entries in the list annexed to the Directive which 
are broader than those included in the Parent-Subsidiary Directive. This is the case of entries 
corresponding to the Czech Republic, Cyprus, Slovenia and Slovakia. For these cases, the list 
is not amended since it is considered that those legal types already enjoying the benefits of the 
Directive  should  not  be  deprived  of  the  harmonised  tax  regime.  Otherwise,  their  legitimate 
expectation would be breached and they would face the tax obstacles to the internal market 
whose elimination is sought in the TFEU and in the Directive. 

There are also some entries that are not amended since they are identical to those included in 
the Parent-Subsidiary Directive. This is the case of the Latvian, Lithuanian, Maltese, Polish, 
Portuguese, Romanian, Finish and UK entities. 

On the other hand, the list has to be updated and there are two entities that should be removed 
since they do no longer exist. These are the German ‘bergrechtliche Gewerkschaft’ and of the 
Hungarian ‘közhasznú társaság’. 

This  recast  will  also  replace  the  list  of  taxes  to  which  the  companies  have  to  be  subject, 
currently included in Article 3 (a) (iii) which will be inserted as Annex I Part B.  

•  Definition of associated company 

According  to  Article  3  (b),  an  association  is  currently  deemed  to  exist  when  one  of  the 
companies has a direct minimum holding of 25 % in the capital of the other company, or a 
third company has a direct minimum holding of 25 % in the capital of both the payer and the 
recipient companies. Member States can if they so wish provide for a level of holding lower 
than 25 % in order to determine whether a company exercises sufficient control over another. 
Furthermore, they can replace the criterion of a minimum capital holding by the criterion of a 
minimum holding in the voting rights. 

This  shareholding  threshold  is  higher  than  that  provided  for  in  the  Parent-Subsidiary 
Directive,  which  only  requires  a  10  %  direct  or  indirect  holding.  The  recast  amends  this 
provision to align the association requirements of the Directive with those established in the 
Parent-Subsidiary  Directive.  Thus,  the  direct  25  %  shareholding  threshold  is  reduced  to  a 
direct  or  indirect  10  %  shareholding  threshold.  This  new  threshold  should  avoid  some 
economic distortions arising from the different scope of the two Directives. This provision is 
renumbered as Article 2 (d). 

•  Definition of permanent establishment 

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Article 2 (c), containing the definition of permanent establishment is renumbers as Article 2 
(e) but its content remains unchanged. 

•  Exclusion of payments as interest and royalties 

Article  4,  renumbered  as  Article  3,  excluding  from  the  interest  and  royalties  definition 
payments deriving from transactions of a hybrid nature, is not amended. 

•  Fraud an abuse 

Article 5, renumbered as Article 4, which contains anti-abuse provisions, is not modified by 
this recast. 

•  Transitional arrangements 

Article 6, renumbered as Article 5, is not amended in substance, but its wording is adjusted to 
take account of the transitional arrangements provided for Bulgaria in the corresponding Act 
of  Accession  and  to  delete  the  reference  to Slovakia,  which  ceased  to  enjoy  the  transitional 
derogation from 1 May 2006. 

•  Review 

Article 8 required the Commission to report to the Council on the operation of the Directive 
and its report was presented in April 2009. This provision is renumbered as Article 7, updated 
and establishes a new deadline for reviewing the impact of the Directive and verifying how its 
objectives are fulfilled. Four years after its implementation, the Commission is to report to the 
Ecofin Council and to the European Parliament on the impact of this recast. 

•  Delimitation clause 

Article  8  is  a  standard  tax  harmonisation  provision.  The  Directive  establishes  the  minimum 
obligations concerning the taxation of cross-border interest and royalty payments but does not 
rule  out  other  more  beneficial  regimes  provided  for  in  national  laws  or  in  double  taxation 
treaties. 

•  Implementation, repeal, entry into force and addressees 

Articles 6, 9, 10 and 11 are standard provisions used especially for the purpose of recasting. 
Article 12 is a standard provision stating that the Directive is addressed to the Member States. 

4. 

BUDGETARY IMPLICATION 

This recast does not have any budgetary implications for the EU. 

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(cid:208) 2003/49/EC (adapted) 

2011/0314 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

on a common system of taxation applicable to interest and royalty payments made 
between associated companies of different Member States 

(recast) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  ⌦ on  the  Functioning  of ⌫  the  European 
Community ⌦ Union ⌫, and in particular Article 94 ⌦ 115 ⌫ thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Parliament17, 

Having regard to the opinion of the European Economic and Social Committee18, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

Council  Directive 2003/49/EC  of  3  June  2003  on  a  common  system  of  taxation 
applicable  to  interest  and  royalty  payments  made  between  associated  companies  of 
different Member States19 has been amended several times. Since further amendments 
are to be made, it should be recast in the interests of clarity. 

(cid:216) new 

(2) 

In a Single ⌦ an internal ⌫ market having the characteristics of a domestic market, 
transactions  between  companies  of  different  Member  States  should  not  be  subject  to 

(cid:208) 2003/49/EC Recital 1 (adapted) 

17 
18 
19 

OJ C , , p. . 
OJ C , , p. . 
OJ L 157, 26.6.2003, p. 49. 

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(3) 

(4) 

(5) 

(6) 

(7) 

less  favourable  tax  conditions  than  those  applicable  to  the  same  transactions  carried 
out between companies of the same Member State. 

(cid:208) 2003/49/EC Recital 2 

This  requirement  is  not  currently  met  as  regards  interest  and  royalty  payments; 
national tax laws coupled, where applicable, with bilateral or multilateral agreements 
may not always ensure that double taxation is eliminated, and their application often 
entails  burdensome  administrative  formalities  and  cash-flow  problems  for  the 
companies concerned.  

(cid:208) 2003/49/EC Recital 4 

The abolition of taxation on interest and royalty payments in the Member State where 
they  arise,  whether  collected  by  deduction  at  source  or  by  assessment,  is  the  most 
appropriate means of eliminating the aforementioned formalities and problems and of 
ensuring  the  equality  of  tax  treatment  as  between  national  and  cross-border 
transactions;  it  is  particularly  necessary  to  abolish  such  taxes  in  respect  of  such 
payments made between associated companies of different Member States as well as 
between permanent establishments of such companies. 

(cid:208) 2003/49/EC Recital 3 
(cid:214) new 

It is necessary to ensure that interest and royalty payments are subject to tax once in a 
Member State (cid:214) and that the benefits of the Directive should only be applicable when 
the income derived from the payment is effectively subject to tax in the Member State 
of  the  receiving  company  or  in  the  Member  State  where  the  recipient  permanent 
establishment is situated.  

(cid:216) new 

This  Directive  should  only  be  applicable  to  the  companies  taking  one  of  the  legal 
forms listed in the Annex I, Part A and the aim should be to extend this list to cover as 
many corporate taxpayers as possible. 

For the purpose of broadening the list of entities to which this Directive should apply, 
two  criteria  can  be  followed.  In  the  first  place,  it  can  be  observed  that  many  of  the 
entries  in  this  list  are  narrower  than  those  included  in  the  Council  Directive 
90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case 
of parent companies and subsidiaries of different Member States20; it is important to 
align both lists and extend the one annexed to this Directive. 

(8) 

In the second place, there are some entries in the list annexed to this Directive that are 
identical  to  or  broader  than  those  included  Directive  90/435/EEC  and  should  not  be 
amended, so that such entities continue enjoying the benefits of this Directive.  

20 

OJ L 225, 20.8.1990, p. 6. 

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(9) 

The  definition  of  associated  companies  of  this  Directive  requires  a  minimum  direct 
holding  of  25  %  while  Directive  90/435/EEC  provides  for  the  exemption  of  profits 
distributions  in  the  case  of  direct  or  indirect  holdings  of  10  %.  The  harmonised  tax 
regime for interest and royalty payments should be coordinated with that of Directive 
90/435/EEC and the holding requirements of this Directive should be reduced to direct 
or indirect holdings of 10 %. 

(10)  The  tax  exemption  provided  for  in this  Directive  in  the  case  of  payments  made  by 
permanent establishments requires that these represent a tax deductible expense for the 
permanent establishment in the Member State in which it is situated in a manner that 
could result in denial of the benefits of this Directive if deduction was refused even in 
case where the payments are related to its activities. It is important to clarify that the 
exemption is applicable in cases where the payment represents an expense incurred for 
the purposes of the permanent establishment’s activity.  

(11)  The  arrangements  should  only  apply  to  the  amount,  if  any,  of  interest  or  royalty 
payments which would have been agreed by the payer and the beneficial owner in the 
absence of a special relationship. 

(cid:208) 2003/49/EC Recital 5 

(12) 

It  is  moreover  necessary  not  to  preclude  Member  States  from  taking  appropriate 
measures to combat fraud or abuse. 

(cid:208) 2003/49/EC Recital 6 

(13)  ⌦ Bulgaria ⌫  ,  Greece  and  Portugal  should,  for  budgetary  reasons,  be  allowed  a 
transitional  period  in  order  that  they  can  gradually  decrease  the  taxes,  whether 
collected by deduction at source or by assessment, on interest and royalty payments, 
until they are able to apply the provisions of Article 1. 

(cid:208) 2003/49/EC Recital 7 (adapted) 

(14)  Spain, which has launched a plan for boosting the Spanish technological potential, for 
budgetary  reasons  should  be  allowed  during  a  transitional  period  not  to  apply  the 
provisions of Article 1 on royalty payments. 

(cid:208)2003/49/EC Recital 8 

(cid:208) 2004/76/EC Recitals 2 and 3 
(adapted) 

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

(16)  Those Acceding ⌦ Member ⌫ States should therefore be permitted, on a temporary 
basis,  until  the  date  of  application  referred  to  in  Article  17(2)  and  (3)  of  Council 

EN 

12 

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Directive  2003/48/EC  of  3  June  2003  on  taxation  of  savings  income  in  the  form  of 
interest payments21 not to apply certain provisions ⌦ of Article 1 of this ⌫ Directive 
2003/49/EC  concerning,  in  the  case  of  Latvia  and  Lithuania,  interest  and  royalty 
payments,  and  in  the  case  of  the  Czech  Republic ⌦ and ⌫ Poland  and  Slovakia, 
royalty payments only. 

(cid:208) 2003/49/EC Recital 9 (adapted) 
(cid:214) new 

(17) 

It  is  necessary  for  the  Commission  to  report  to  the  Council  (cid:214)and  to  the  European 
Parliament  on  the impact   operation  of  ⌦ this ⌫  Directive  three  years  after  the 
date  by  which it  must be  transposed (cid:214)in order to verify how the objectives pursued 
are achieved , in particular with a view to extending its coverage to other companies 
or undertakings and reviewing the scope of the definition of interest and royalties in 
pursuance  of  the  necessary  convergence  of  the  provisions  dealing  with  interest  and 
royalties in national legislation and in bilateral or multilateral double-taxation treaties 

(cid:208) 2003/49/EC Recital 10 
(adapted) 

(18)  Since  the  objective  of  the  proposed  action,  namely  setting  up  a  common  system  of 
taxation  applicable  to  interest  and  royalty  payments  of  associated  companies  of 
different Member States cannot be sufficiently achieved by the Member States and can 
therefore  be  better  achieved  at  Community  ⌦ Union ⌫  level,  the  Community 
⌦ Union ⌫ may adopt measures, in accordance with the principle of subsidiarity as 
set out in Article 5 of the Treaty ⌦ on the European Union ⌫ . In accordance with 
the  principle  of  proportionality,  as  set  out  in  that  Article,  this  Directive  does  not  go 
beyond what is necessary in order to achieve that objective. 

(cid:216) new 

(19)  The obligation to transpose this Directive into national law should be confined to those 
provisions  which  represent  a  substantive  change  as  compared  with  the  earlier 
Directives.  The  obligation  to  transpose  the  provisions  which  are  unchanged  arises 
under the earlier Directives. 

(20)  This  Directive  should  be  without  prejudice  to  the  obligations  of  the  Member  States 
relating  to  the  time-limits  for  transposition  into  national  law  and  application  of  the 
Directives set out in Annex II, Part B, 

21 

OJ L 157, 26.6.2003, p. 38. 

EN 

13 

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HAS ADOPTED THIS DIRECTIVE: 

(cid:208) 2003/49/EC (adapted) 
(cid:214) new 

Article 1 

Scope and procedure 

1.  Interest  or  royalty  payments  arising  in  a  Member  State  shall  be  exempt  from  any  taxes 
imposed on those payments in that ⌦ Member ⌫ State, whether by deduction at source or 
by assessment, provided that the beneficial owner of the interest or royalties is a company of 
another  Member  State  or  a  permanent  establishment  situated  in  another  Member  State  of  a 
company of a Member State (cid:214) and is effectively subject to tax on the income deriving from 
those payments in that other Member State . 

2.  A  payment  made  by  a  company  of  a  Member  State  or  by  a  permanent  establishment 
situated in another Member State shall be deemed to arise in that Member State, hereinafter 
referred to as the ‘source State’. 

(cid:208) 2003/49/EC (adapted) 
(cid:214) new 

3. A permanent establishment shall be treated as the payer of interest or royalties only insofar 
as  those  payments  represent  ⌦ an ⌫a  tax-deductible  expense  (cid:214)incurred   for  (cid:214) the 
purposes of the activity of  the permanent establishment in the Member State in which it is 
situated. 

4.  A  company  of  a  Member  State  shall  be  treated  as  the  beneficial  owner  of  interest  or 
royalties  only  if  it  receives  those  payments  for  its  own  benefit  and  not  as  an  intermediary, 
such as an agent, trustee or authorised signatory, for some other person. 

(cid:208) 2003/49/EC 

5. A permanent establishment shall be treated as the beneficial owner of interest or royalties: 

(cid:208) 2003/49/EC (adapted) 

(a)  if  the  debt-claim,  right  or  use  of  information  in  respect  of  which  interest  or 
royalty  payments  arise  is  effectively  connected  with  that  permanent  establishment; 
and 

(b)  if  the  interest  or  royalty  payments  represent  income  in  respect  of  which  that 
permanent establishment is subject in the Member State in which it is situated to one 
of  the  taxes  mentioned  in  Article  3(a)(iii) ⌦ Annex  I,  Part  B ⌫  or  in  the  case  of 
Belgium to the ‘impôt des non-résidents/belasting der niet-verblijfhouders’ or in the 
case of Spain to the ‘Impuesto sobre la Renta de no Residentes’ or to a tax which is 
identical  or  substantially  similar  and  which  is  imposed  after  the  date  of  entry  into 
force of this Directive in addition to, or in place of, those existing taxes. 

EN 

14 

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(cid:208) 2003/49/EC 

6. Where a permanent establishment of a company of a Member State is treated as the payer, 
or  as  the  beneficial  owner,  of  interest  or  royalties,  no  other  part  of  the  company  shall  be 
treated  as  the  payer,  or  as  the  beneficial  owner,  of  that  interest  or  those  royalties  for  the 
purposes of this Article. 

7.  This  Article  shall  apply  only  if  the  company  which  is  the  payer,  or  the  company  whose 
permanent  establishment  is  treated  as  the  payer,  of  interest  or  royalties  is  an  associated 
company of the company which is the beneficial owner, or whose permanent establishment is 
treated as the beneficial owner, of that interest or those royalties. 

8.  This  Article  shall  not  apply  where  interest  or  royalties  are  paid  by  or  to  a  permanent 
establishment situated in a third State of a company of a Member State and the business of the 
company is wholly or partly carried on through that permanent establishment. 

9.  Nothing  in  this  Article  shall  prevent  a  Member  State  from  taking  interest  or  royalties 
received  by  its  companies,  by  permanent  establishments  of  its  companies  or  by  permanent 
establishments situated in that State into account when applying its tax law. 

(cid:208) 2003/49/EC (adapted) 

10.  A  Member  State  shall  have  the  option  of  not  applying  this  Directive  to  a  company  of 
another  Member  State  or  to  a  permanent  establishment  of  a  company  of  another  Member 
State in circumstances where the conditions set out in Article 3(b) ⌦ 2(d) ⌫ have not been 
maintained for an uninterrupted period of at least two years. 

11. The source State may require that fulfilment of the requirements laid down in this Article 
and in Article 3 ⌦ 2 ⌫ be substantiated at the time of payment of the interest or royalties by 
an attestation. If fulfilment of the requirements laid down in this Article has not been attested 
at the time of payment, the Member State shall be free to require deduction of tax at source. 

12. The source State may make it a condition for exemption under this Directive that it has 
issued  a  decision  currently  granting  the  exemption  following  an  attestation  certifying  the 
fulfilment of the requirements laid down in this Article and in Article 3 ⌦ 2 ⌫ . A decision 
on  exemption  shall  be  given  within  three  months  at  most  after  the  attestation  and  such 
supporting information as the source State may reasonably ask for have been provided, and 
shall be valid for a period of at least one year after it has been issued. 

13. For the purposes of paragraphs 11 and 12, the attestation to be given shall, in respect of 
each contract for the payment, be valid for at least one year but for not more than three years 
from the date of issue and shall contain the following information: 

(a)  proof  of  the  receiving  company’s  residence  for  tax  purposes  and,  where 
necessary, the existence of a permanent establishment certified by the tax authority 
of the Member State in which the receiving company is resident for tax purposes or 
in which the permanent establishment is situated; 

EN 

15 

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(b) beneficial ownership by the receiving company in accordance with paragraph 4 
or  the  existence  of  conditions  in  accordance  with  paragraph  5  where  a  permanent 
establishment is the recipient of the payment; 

(c) fulfilment of the requirements in accordance with Article 3(a)(iii) ⌦ 2(c)(iii) ⌫ 
in the case of the receiving company; 

(d)  a  minimum  holding  or  the  criterion  of  a  minimum  holding  of  voting  rights  in 
accordance with Article 3(b) ⌦ 2(d) ⌫ ; 

(e) the period for which the holding referred to in point (d) has existed. 

Member  States  may  request  in  addition  the  legal  justification  for  the  payments  under  the 
contract (e.g. loan agreement or licensing contract). 

(cid:208) 2003/49/EC 

14.  If  the  requirements  for  exemption  cease  to  be  fulfilled,  the  receiving  company  or 
permanent  establishment  shall  immediately  inform  the  paying  company  or  permanent 
establishment and, if the source State so requires, the competent authority of that State. 

15.  If  the  paying  company  or  permanent  establishment  has  withheld  tax  at  source  to  be 
exempted under this Article, a claim  may  be  made  for  repayment of that tax at  source.  The 
Member  State  may  require  the  information  specified  in  paragraph  13.  The  application  for 
repayment must be submitted within the period laid down. That period shall last for at least 
two years from the date when the interest or royalties are paid. 

16. The source State shall repay the excess tax withheld at source within one year following 
due receipt of the application and such supporting information as it may reasonably ask for. If 
the tax withheld at source has not been refunded within that period, the receiving company or 
permanent establishment shall be entitled on expiry of the year in question to interest on the 
tax  which  is  refunded  at  a  rate  corresponding  to  the  national  interest  rate  to  be  applied  in 
comparable cases under the domestic law of the source State. 

(cid:208) 2003/49/EC (adapted) 

Article 2 

Definition⌦s ⌫  

For the purposes of this Directive ⌦, the following definitions apply ⌫ : 

(a) ‘interest’ means income from debt-claims of every kind, whether or not secured 
by mortgage and whether or not carrying a right to participate in the debtor’s profits, 
and  in  particular,  income  from  securities  and  income  from  bonds  or  debentures, 
including  premiums  and  prizes  attaching  to  such  securities,  bonds  or  debentures; 
penalty charges for late payment shall not be regarded as interest; 

(b) ‘royalties’ means payments of any kind received as a consideration for the use of, 
or  the  right  to  use,  any  copyright  of  literary,  artistic  or  scientific  work,  including 

EN 

16 

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cinematograph  films  and  software,  any  patent,  trade  mark,  design  or  model,  plan, 
secret  formula  or  process,  or  for  information  concerning  industrial,  commercial  or 
scientific  experience;  payments  for  the  use  of,  or  the  right  to  use,  industrial, 
commercial or scientific equipment shall be regarded as royalties; 

(c) ‘company of a Member State’ means any company: 

(cid:208) 2003/49/EC (adapted) 

(i) taking one of the forms listed in the Annex I, Part A hereto; and 

(ii) which in accordance with the tax laws of a Member State is considered to 
be  resident  in  that  Member  State  and  is  not,  within  the  meaning  of  a  Double 
Taxation Convention on Income concluded with a third state, considered to be 
resident for tax purposes outside the ⌦ Union ⌫ Community ; and 

(iii) which is subject to one of the following taxes ⌦ listed in Annex  I,  Part 
B, ⌫  without  being  exempt,  or  to  a  tax  which  is  identical  or  substantially 
similar and which is imposed after the date of entry into force of this Directive 
in addition to, or in place of, those existing taxes:; 

impôt des sociétés/vennootschapsbelasting in Belgium, 

(cid:208) 2003/49/EC 

selskabsskat in Denmark, 

Körperschaftsteuer in Germany, 

Φόρος εισοδήµατος νοµικών προσώπων in Greece, 

impuesto sobre sociedades in Spain, 

impôt sur les sociétés in France, 

corporation tax in Ireland, 

imposta sul reddito delle persone giuridiche in Italy, 

impôt sur le revenu des collectivités in Luxembourg, 

vennootschapsbelasting in the Netherlands, 

Körperschaftsteuer in Austria, 

imposto sobre o rendimento da pessoas colectivas in Portugal, 

yhteisöjen tulovero/inkomstskatten för samfund in Finland, 

statlig inkomstskatt in Sweden, 

corporation tax in the United Kingdom, 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

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17 

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– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

Daň z příjmů právnických osob in the Czech Republic, 

(cid:208) 2004/66/EC Art. 1 and Annex  

Tulumaks in Estonia, 

φόρος εισοδήµατος in Cyprus, 

Uzņēmumu ienākuma nodoklis in Latvia, 

Pelno mokestis in Lithuania, 

Társasági adó in Hungary, 

Taxxa fuq l-income in Malta, 

Podatek dochodowy od osób prawnych in Poland, 

Davek od dobička pravnih oseb in Slovenia, 

Daň z príjmov právnických osôb in Slovakia, 

(cid:208) 2006/98/EC Art. 1 and Annex 
point 9(a) 

корпоративен данък in Bulgaria, 

impozit  pe  profit,  impozitul  pe  veniturile  obținute  din  România  de 
nerezidenți in Romania; 

(cid:208) 2003/49/EC (adapted) 
(cid:214) new 

(d) a company is an ‘associated company’ of a second company if, at least: 

(i)  the  first  company  has  a  direct  minimum  holding  of  25  (cid:214) 10   %  in  the 
capital of the second company, or 

(ii) the second company has a direct minimum holding of 25 (cid:214) 10  % in the 
capital of the first company, or 

(iii) a third company has a direct minimum holding  of  25 (cid:214) 10  % both in 
the capital of the first company and in the capital of the second company. 

Holdings  must  involve  only  companies  resident  in  Community  ⌦ Union ⌫ 
territory. 

However,  Member  States  shall  have  the  option  of  replacing  the  criterion  of  a 
minimum holding in the capital with that of a minimum holding of voting rights; 

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(e) ‘permanent establishment’ means a fixed place of business situated in a Member 
State through which the business of a company of another Member State is wholly or 
partly carried on. 

(cid:208) 2003/49/EC 

Article 3 

Exclusion of payments as interest or royalties 

1.  The  source  State  shall  not  be  obliged  to  ensure  the  benefits  of  this  Directive  in  the 
following cases: 

(a) payments which are treated as a distribution of profits or as a repayment of capital 
under the law of the source State; 

(b)  payments  from  debt-claims  which  carry  a  right  to  participate  in  the  debtor’s 
profits; 

(c)  payments  from  debt-claims  which  entitle  the  creditor  to  exchange  his  right  to 
interest for a right to participate in the debtor’s profits; 

(d)  payments  from  debt-claims  which  contain  no  provision  for  repayment  of  the 
principal amount or where the repayment is due more than 50 years after the date of 
issue. 

2. Where, by reason of a special relationship between the payer and the beneficial owner of 
interest or royalties, or between one of them and some other person, the amount of the interest 
or  royalties  exceeds  the  amount  which  would  have  been  agreed  by  the  payer  and  the 
beneficial owner in the absence of such a relationship, the provisions of this Directive shall 
apply only to the latter amount, if any. 

Article 4 

Fraud and abuse 

1. This Directive shall not preclude the application of domestic or agreement-based provisions 
required for the prevention of fraud or abuse. 

2. Member States may, in the case of transactions for which the principal motive or one of the 
principal  motives  is  tax  evasion,  tax  avoidance  or  abuse,  withdraw  the  benefits  of  this 
Directive or refuse to apply this Directive. 

EN 

19 

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(cid:208) 2003/49/EC (adapted) 
(cid:206)1 2004/76/EC Art. 1(1) 

Article 5 

Transitional rules for ⌦ Bulgaria ⌫ , (cid:206)1 the Czech Republic  , Greece, Spain, 
(cid:206)1 Latvia, Lithuania, Poland  , and Portugal and Slovakia 

(cid:208) 2003/49/EC (adapted) 
(cid:206)1 2004/76/EC Art. 1(1) 

1. Greece, (cid:206)1 Latvia, Poland  and Portugal shall be authorised not to apply the provisions 
of Article 1 ⌦ of  this Directive ⌫ until  the date of  application referred to in Article 17(2) 
and (3) of Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of 
interest payments. During a transitional 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. 

(cid:208) 2004/76/EC Art. 1(1) (adapted) 

Lithuania shall be authorised not to apply the provisions of Article 1 ⌦ of this Directive ⌫ 
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  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  permanent  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 %. 

(cid:208) 2003/49/EC (adapted) 
(cid:206)1 2004/76/EC Art. 1(1) 
(adapted) 

(cid:206)1 The Czech Republic and  Spain shall be authorised, for royalty payments only, not to 
apply the provisions of Article 1 ⌦ of this Directive ⌫ 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  situated  in 
another Member State of an associated company of a Member State must not exceed 10 %. 
Slovakia  shall  be  authorised,  for  royalty  payments  only,  not  to  apply  the  provisions  of 
Article 1 during a transitional period of two years starting on 1 May 2004. 

EN 

20 

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(cid:208) 2003/49/EC (adapted) 
(cid:206)1 2004/76/EC Art. 1(1) 
(adapted) 

⌦ Bulgaria  shall  be  authorised  not  to  apply  the  provisions  of  Article  1  until  31  December 
2014. During this transitional period, 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% 
until 31 December 2010 and must not exceed 5% for the following years until 31 December 
2014. ⌫ 

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  provided  by 
bilateral agreements concluded between ⌦Bulgaria, ⌫ (cid:206)1 the Czech Republic  , Greece, 
Spain,  (cid:206)1 Latvia,  Lithuania,  Poland   , ⌦ or ⌫  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: 

(cid:208) 2003/49/EC (adapted) 
(cid:206)1 2004/76/EC Art. 1(1) 

– 

– 

– 

receives interest or royalties from an associated company of ⌦ Bulgaria, ⌫Greece, 
(cid:206)1 Latvia, Lithuania, Poland  or Portugal, 

(cid:208) 2003/49/EC 
(cid:206)1 2004/76/EC Art. 1(1) 
(adapted) 

receives royalties from an associated company of (cid:206)1 the Czech Republic or Spain 
or Slovakia, 

(cid:208) 2003/49/EC (adapted) 
(cid:206)1 2004/76/EC Art. 1(1) 

interest  or  royalties  from  a  permanent  establishment  situated 

receives 
in 
⌦ Bulgaria, ⌫Greece,  (cid:206)1 Latvia,  Lithuania,  Poland   or  Portugal,  of  an 
associated company of a Member State, 

or 

EN 

21 

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(cid:208) 2003/49/EC (adapted) 
(cid:206)1 2004/76/EC Art. 1(1) 
(adapted) 

– 

receives  royalties  from  a  permanent  establishment  situated  in  (cid:206)1 the  Czech 
Republic   , ⌦ or ⌫ 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 ⌦ Bulgaria, ⌫ (cid:206)1 the 
Czech Republic  , Greece, Spain, (cid:206)1 Latvia, Lithuania, Poland  or 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. 

(cid:208) 2003/49/EC (adapted) 
(cid:206)1 2004/76/EC Art. 1(1) 
(adapted) 

3. The deduction provided for in paragraph 2 need not exceed the lower of: 

(a)  the  tax  payable  in ⌦Bulgaria, ⌫  (cid:206)1 the  Czech  Republic   ,  Greece,  Spain, 
(cid:206)1 Latvia,  Lithuania,  Poland  or Portugal  or  Slovakia,  on  such  income  on  the 
basis of paragraph 1, 

or 

(cid:208) 2003/49/EC 

(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 company or in which the permanent establishment is situated. 

(cid:208) 2003/49/EC (adapted) 

Article 6 

Implementation ⌦ Transposition ⌫ 

1.  Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative  provisions 
necessary  to  comply  with  this  Directive  ⌦ Article  1(1)  and  (3),  Article  2(c)  and  (d),  and 
Annex I, Part A ⌫ not later than ⌦ by ⌫ 1 January 2004 ⌦ 2012 at the latest ⌫. They 
shall  forthwith  inform ⌦ communicate  to ⌫  the  Commission  thereof ⌦ the  text  of  those 
provisions and a correlation table between those provisions and this Directive ⌫. 

When  Member  States  adopt  these  measures  ⌦ those  provisions ⌫  ,  they  shall  contain  a 
reference to this Directive or shall be accompanied by such reference on the occasion of their 
official  publication.  The  methods  of  making  such  a  reference  shall  be  laid  down  by  the 
Member  States.  ⌦ They  shall  also  include  a  statement  that  references  in  existing  laws, 
regulations and administrative provisions to the directives repealed by this Directive shall be 

EN 

22 

   EN 

 
 
 
 
 
 
 
 
construed as references to this Directive. Member States shall determine how such reference 
is to be made and how that statement is to be formulated. ⌫ 

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,  together  with  a  table 
showing how the provisions of this Directive correspond to the national provisions adopted. 

(cid:208) 2003/49/EC 

(cid:208) 2003/49/EC (adapted) 
(cid:214) new 

Article 7 

Review 

By  31  December  2006,  (cid:214) By  31  December  2016   ,  the  Commission  shall  report  to  the 
Council on the (cid:214) economic impact  operationof this Directive, in particular with a view to 
extending its coverage to companies or undertakings other than those referred to in Article 3 
and the Annex. 

(cid:208) 2003/49/EC 

Article 8 

Delimitation clause 

This  Directive  shall  not  affect  the  application  of  domestic  or  agreement-based  provisions 
which go beyond the provisions of this Directive and are designed to eliminate or mitigate the 
double taxation of interest and royalties. 

(cid:216) new 

Article 9 

Repeal 

Directive  2003/49/EC,  as  amended  by  the  acts  listed  in  Annex  II,  Part  A,  is  repealed  with 
effect from 1 January 2013, without prejudice to the obligations of the Member States relating 
to the time-limits for transposition into national law and application of the Directives set out 
in Annex II, Part B. 

References  to  the  repealed  Directive  shall  be  construed  as  references  to  this  Directive  and 
shall be read in accordance with the correlation table in Annex III. 

EN 

23 

   EN 

 
 
 
 
 
(cid:208) 2003/49/EC (adapted) 

Article 10 

Entry into force 

This Directive shall enter into force on the ⌦ twentieth ⌫ day ⌦ following that ⌫ of its 
publication in the Official Journal of the European Union. 

Article 1(1) and (3), Article 2(c) and (d) and Annex I, Part A shall apply from 1 January 2013.  

(cid:216) new 

(cid:208) 2003/49/EC 

Article 11 

Addressees 

This Directive is addressed to the Member States. 

Done at Brussels, 

For the Council 
The President 

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24 

   EN 

 
 
 
 
 
 
(1) 

(2) 

(3a) 

(cid:208) 2003/49/EC (adapted) 

ANNEX I 

PART A 

LIST OF COMPANIES COVERED BY ARTICLE 2(c) of the Directive 

(cid:216) new 

(cid:214) The  European  company  or  Societas  Europaea  (SE),  as  established  Council 
Regulation  (EC)  No  2157/2001  of  8  October  2001  on  the  Statute  for  a  European 
(SE)22  and  Council  Directive  2001/86/EC  of  8  October  2001 
company 
supplementing the Statute for a European company with regard to the involvement of 
employees;23  

(cid:216) new 

(cid:214) the  European  Cooperative  Society  (SCE),  as  established  in  Council  Regulation 
(EC)  No  1435/2003  of  22  July  2003  on  the  Statute  for  a  European  Cooperative 
Society (SCE)24  and  Council  Directive  2003/72/EC  of  22  July  2003  supplementing 
the  Statute  for  a  European  Cooperative  Society  with  regard  to  the  involvement  of 
employees25;   

(cid:208) 2003/49/EC 
(cid:214) new 

companies under Belgian law known as: ‘naamloze vennootschap/société anonyme, 
commanditaire  vennootschap  op  aandelen/société  en  commandite  par  actions, 
besloten vennootschap met beperkte aansprakelijkheid/société privée à responsabilité 
limitée’ (cid:214) ‘coöperatieve  vennootschap  met  beperkte  aansprakelijkheid’/‘société 
coopérative  à  responsabilité  limitée’,  ‘coöperatieve  vennootschap  met  onbeperkte 
aansprakelijkheid’/‘société  coopérative  à  responsabilité  illimitée’,  ‘vennootschap 
onder 
commanditaire 
vennootschap’/‘société  en  commandite  simple’,  public  undertakings  which  have 
adopted  one  of  the  abovementioned  legal  forms  and  other  companies  constituted 
under  Belgian  law  subject  to  Belgian  corporate  tax   and  those  public  law  bodies 
that operate under private law; 

firma’/‘société 

collectif’, 

‘gewone 

nom 

en 

22 
23 
24 
25 

OJ L 294, 10.11.2001,p.1. 
OJ L 294, 10.11.2001, p. 22. 
OJ L 207, 18.8.2003, p. 1. 
OJ L 18.8.2003, p. 25. 

EN 

25 

   EN 

 
 
 
 
 
                                                 
(cid:208) 2006/98/EC Art. 1 and Annex 
point 9(b)  
(cid:214) new 

(4aa) 

law  known  as: 
‘дружеството 

‘събирателното  дружество’, 
companies  under  Bulgarian 
с  ограничена  отговорност’, 
‘командитното  дружество’, 
‘акционерното 
акции’, 
дружество’, 
(cid:214) ‘неперсонифицирано  дружество’,   ‘кооперации’,  ‘кооперативни  съюзи’, 
‘държавни  предприятия’  constituted  under  Bulgarian  law  and  carrying  on 
commercial activities; 

‘командитното 

дружество 

с 

(5p) 

companies under Czech law known as: ‘akciová společnost’, ‘společnost s ručením 
omezeným’, ‘veřejná obchodní společnost’, ‘komanditní společnost’, ‘družstvo’;  

(cid:208) 2004/66/EC Art. 1 and Annex  

(6b) 

(7c) 

(cid:208) 2003/49/EC 
(cid:214) new 

companies  under  Danish  law  known  as:  ‘aktieselskab’  and  ‘anpartsselskab’  (cid:214)  and 
other  companies  subject  to  tax  under  the  Corporation  Tax  Act,  insofar  as  their 
taxable income is calculated and taxed in accordance with the general tax legislation 
rules applicable to ‘aktieselskaber’  ; 

law 

under 

German 

companies 
‘Aktiengesellschaft, 
Kommanditgesellschaft  auf  Aktien,  Gesellschaft  mit  beschränkter  Haftung’,  and 
‘bergrechtliche  Gewerkschaft’  (cid:214) Versicherungsverein 
auf  Gegenseitigkeit’, 
‘Erwerbs-  und  Wirtschaftsgenossenschaft’, 
‘Betriebe  gewerblicher  Art  von 
juristischen  Personen  des  öffentlichen  Rechts’,  and  other  companies  constituted 
under German law subject to German corporate tax  ; 

known 

as: 

(8q) 

companies  under  Estonian  law  known  as:  ‘täisühing’,  ‘usaldusühing’,  ‘osaühing’, 
‘aktsiaselts’, ‘tulundusühistu’;  

(cid:208) 2004/66/EC Art. 1 and Annex  

(cid:208) 2003/49/EC (adapted) 
(cid:214) new 

(9gh) 

companies  in  (cid:214) incorporated  or  existing  under   Irish  law  known  as  public 
companies limited by shares or by guarantee, private companies limited by shares or 
by  guarantee,  bodies  registered  under  the  Industrial  and  Provident  Societies  Act, 
building  societies  incorporated  under  the  Building  Societies  Acts  (cid:214) and  trustee 
savings banks within the meaning of the Trustee Savings Banks Act, 1989 ; 

EN 

26 

   EN 

 
 
 
 
 
 
(cid:208) 2003/49/EC  
(cid:214) new 

(10d) 

(11e) 

(f12) 

‘ανώνυµη  εταιρíα’,  (cid:214) ‘εταιρεία 
companies  under  Greek 
περιορισµένης  ευθύνης  (Ε.Π.Ε.)’·and  other  companies  constituted  under  Greek  law 
subject to Greek corporate tax ; 

law  known  as: 

companies under Spanish law known as: ‘sociedad anónima, sociedad comanditaria 
por  acciones,  sociedad  de  responsabilidad  limitada’,  those  public  law  bodies  which 
operate under private law (cid:214)and other entities constituted under Spanish law subject 
to Spanish corporate tax (‘Impuesto sobre Sociedades’) ; 

companies  under  French  law  known  as:  ‘société  anonyme,  société  en  commandite 
par  actions,  société  à  responsabilité  limitée’  (cid:214)‘sociétés  par  actions  simplifiées’, 
‘sociétés  d’assurances  mutuelles’,  ‘caisses  d’épargne  et  de  prévoyance’,  ‘sociétés 
civiles’ which are automatically subject to corporation tax, ‘coopératives’, ‘unions de 
coopératives’,  industrial and commercial public establishments and undertakings, 
(cid:214)and  other  companies  constituted  under  French  law  subject  to  French  corporate 
tax  ; 

(13h) 

companies  under  Italian  law  known  as:  ‘società  per  azioni,  società  in  accomandita 
per  azioni,  società  a  responsabilità  limitata’  (cid:214),  ‘società  cooperative’,  ‘società  di 
mutua  assicurazione’   and  public  and  private  entities  carrying  on  industrial  and 
commercial activities; 

(cid:208) 2004/66/EC Art. 1 and Annex  

(14r) 

companies  under  Cypriot  law  known  as:  companies  in  accordance  with  the 
Company’s  Law,  Public  Corporate  Bodies  as  well  as  any  other  Body  which  is 
considered as a company in accordance with the Income tax Laws; 

(s15) 

companies  under  Latvian  law  known  as:  ‘akciju  sabiedrība’,  ‘sabiedrība  ar 
ierobežotu atbildību’; 

(t16) 

companies incorporated under the law of Lithuania; 

(cid:208) 2003/49/EC (adapted) 
(cid:214) new 

(i17) 

companies  under  Luxembourg  law  known  as:  ‘société  anonyme,  société  en 
limitée’,  (cid:214)‘société 
commandite  par  actions,  and  société  à 
coopérative’,  ‘société  coopérative  organisée  comme  une  société  anonyme’, 
‘association d’assurances mutuelles’, ‘association d’épargne-pension’, ‘entreprise de 
nature commerciale, industrielle ou minière de l’Etat, des communes, des syndicats 
de  communes,  des  établissements  publics  et  des  autres  personnes  morales  de  droit 
public’,  and  other  companies  constituted  under  Luxembourg  law  subject  to 
Luxembourg corporate tax ; 

responsabilité 

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27 

   EN 

 
 
 
 
(cid:208) 2004/66/EC Art. 1 and Annex 

(u18) 

companies under Hungarian law known as: ‘közkereseti társaság’, ‘betéti társaság’, 
‘közös  vállalat’,  ‘korlátolt  felelősségű  társaság’,  ‘részvénytársaság’,  ‘egyesülés’, 
‘közhasznú társaság’, ‘szövetkezet’;  

(v19) 

companies  under  Maltese  law  known  as:  ‘Kumpaniji  ta’  Responsabilita’  Limitata’, 
‘Soċjetajiet in akkomandita li l-kapital tagħhom maqsum f’azzjonijiet’;  

(cid:208) 2003/49/EC (adapted) 
(cid:214) new 

(j20) 

(k21) 

companies  under  Dutch  law  known  as:  ‘naamloze  vennootschap’,  and  ‘besloten 
vennootschap  met  beperkte 
commanditaire 
vennootschap’,  ‘Coöperatie’,  ‘onderlinge  waarborgmaatschappij’,  ‘fonds  voor 
gemene  rekening’,  ‘vereniging  op  coöperatieve  grondslag’,  ‘vereniging  welke  op 
onderlinge  grondslag  als  verzekeraar  of  kredietinstelling  optreedt’,  and  other 
companies constituted under Dutch law subject to Dutch corporate tax ; 

aansprakelijkheid’  (cid:214), 

‘open 

companies under Austrian law known as: ‘Aktiengesellschaft’, and ‘Gesellschaft mit 
beschränkter  Haftung’,  (cid:214) ‘Versicherungsvereine  auf  Gegenseitigkeit’,  ‘Erwerbs- 
und  Wirtschaftsgenossenschaften’,  ‘Betriebe  gewerblicher  Art  von  Körperschaften 
des  öffentlichen  Rechts’,  ‘Sparkassen’  and  other  companies  constituted  under 
Austrian law subject to Austrian corporate tax;  

(cid:208) 2004/66/EC Art. 1 and Annex 
(cid:214) new 

(w22) 

companies  under  Polish  law  known  as:  ‘spółka  akcyjna’,  ‘spółka  z  ograniczoną 
odpowiedzialnością’ (cid:214) ‘spółdzielnia’, ‘przedsiębiorstwo państwowe’ ; 

(l23) 

commercial  companies  or  civil  law  companies  having  a  commercial  form, 
cooperatives  and  public  undertakings  incorporated  in  accordance  with  Portuguese 
law; 

(cid:208) 2003/49/EC 

(cid:208) 2006/98/EC Art. 1 and Annex 
point 9(b) 

(ab24)  companies  under  Romanian  law  known  as:  ‘societăți  pe  acțiuni’,  ‘societăți  în 

comandită pe acțiuni’, ‘societăți cu răspundere limitată’;  

(25) 

companies under Slovenian law known as: ‘delniška družba’, ‘komanditna delniška 
družba’,  ‘komanditna  družba’,  ‘družba  z  omejeno  odgovornostjo’,  ‘družba  z 
neomejeno odgovornostjo’;  

(cid:208) 2004/66/EC Art. 1 and Annex  

EN 

28 

   EN 

 
 
 
 
 
 
 
(26) 

companies under Slovak law known as: ‘akciová spoločnost’, ‘spoločnosť s ručením 
obmedzeným’, ‘komanditná spoločnost’, ‘verejná obchodná spoločnost’, ‘družstvo’;  

(cid:208) 2003/49/EC 

(m27)  companies 

‘osakeyhtiö/aktiebolag, 
osuuskunta/andelslag, säästöpankki/sparbank’ and ‘vakuutusyhtiö/försäkringsbolag’; 

Finnish 

known 

under 

law 

as: 

(n28) 

companies  under  Swedish  law  known  as:  ‘aktiebolag’,  and  ‘försäkringsaktiebolag’, 
(cid:214)ekonomiska föreningar’, ‘sparbanker’, ‘ömsesidiga försäkringsbolag’ ; 

(cid:208) 2003/49/EC (adapted) 
(cid:214) new 

(o29) 

companies incorporated under the law of the United Kingdom. 

(cid:208) 2003/49/EC 

(cid:208) 2003/49/EC (adapted) 

⌦ PART B 

LIST OF TAXES REFERRED TO IN ARTICLE 2(c) ⌫ 

– 

Impôt des sociétés/vennootschapsbelasting in Belgium,  

(cid:208) 2003/49/EC 

– 

корпоративен данък in Bulgaria 

(cid:208) 2006/98/EC Art. 1 and Annex 
point 9(a) 

(cid:208) 2004/66/EC Art. 1 and Annex  

– 

– 

– 

Daň z příjmů právnických osob in the Czech Republic, 

(cid:208) 2003/49/EC 

selskabsskat in Denmark, 

Körperschaftsteuer in Germany, 

– 

Tulumaks in Estonia, 

(cid:208) 2004/66/EC Art. 1 and Annex  

EN 

29 

   EN 

 
 
 
 
 
 
 
 
 
 
– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

(cid:208) 2003/49/EC 

corporation tax in Ireland, 

Φόρος εισοδήµατος νοµικών προσώπων in Greece, 

impuesto sobre sociedades in Spain, 

impôt sur les sociétés in France, 

imposta sul reddito delle persone giuridiche in Italy,  

(cid:208) 2004/66/EC Art. 1 and Annex  

φόρος εισοδήµατος in Cyprus, 

Uzņēmumu ienākuma nodoklis in Latvia, 

Pelno mokestis in Lithuania, 

impôt sur le revenu des collectivités in Luxembourg, 

(cid:208) 2003/49/EC 

(cid:208) 2004/66/EC Art. 1 and Annex  

Társasági adó in Hungary, 

Taxxa fuq l-income in Malta, 

vennootschapsbelasting in the Netherlands, 

Körperschaftsteuer in Austria,  

(cid:208) 2003/49/EC 

Podatek dochodowy od osób prawnych in Poland, 

(cid:208) 2004/66/EC Art. 1 and Annex  

imposto sobre o rendimento da pessoas colectivas in Portugal,  

(cid:208) 2003/49/EC 

impozit  pe  profit,  impozitul  pe  veniturile  obținute  din  România  de  nerezidenți  in 
Romania; 

(cid:208) 2006/98/EC Art. 1 and Annex 
point 9(a) 

EN 

30 

   EN 

 
 
 
 
 
 
 
 
 
(cid:208) 2004/66/EC Art. 1 and Annex  

– 

– 

– 

– 

– 

Davek od dobička pravnih oseb in Slovenia, 

Daň z príjmov právnických osôb in Slovakia, 

yhteisöjen tulovero/inkomstskatten för samfund in Finland, 

(cid:208) 2003/49/EC 

statlig inkomstskatt in Sweden, 

corporation tax in the United Kingdom. 

EN 

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(cid:207) 

ANNEX II 

PART A 

Repealed Directive with list of its successive amendments 

(referred to in Article 9) 

Council Directive 2003/49/EC 

(OJ L 157, 26.6.2003, p. 49) 

Council Directive 2004/66/EC 

only point V(3) of the Annex 

(OJ L 168, 1.5.2004, p. 35) 

Council Directive 2004/76/EC 

(OJ L 157, 30.4.2004, p. 106) 

Council Directive 2006/98/EC 

only point 9 of the Annex 

(OJ L 363, 20.12.2006, p. 129) 

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PART B 

List of time-limits for transposition into national law 

(referred to in Article 10) 

Directive 

Time-limit for transposition 

Date of application 

2003/49/EC 

1 January 2004 

1 July 2011 (1) (2)  

2004/66/EC 

2004/76/EC 

2006/98/EC 

1 May 2004 

1 May 2004 

1 January 2007 

1 July 2013 (3) 

1 January 2015 (4) 

− 

− 

− 

(1) Applicable to Lithuania, as regards the provisions of Article 1. 

(2) Applicable to the Czech Republic and Spain, as regards the provisions of Article 1 in the 
case of royalty payments. 

(3) Applicable to Greece, Latvia, Poland and Portugal, as regards the provisions of Article 1. 

(4) Applicable to Bulgaria, as regards the provisions of Article 1. 

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ANNEX III 

Correlation table 

Directive 2003/49/E 

This Directive 

Articles 1  

Article 2  

Article 3(a) 

Article 1  

Article 2(a) and (b) 

Article 2(c) and Annex I, Part B 

Article 3(b) and (c) 

Article 2(d) and (e) 

Article 4,  

Article 5 

Article 6 

Article 7 

Article 8 

Article 9 

− 

Article 10 

Article 11 

Annex 

− 

− 

− 

Article 3 

Article 4 

Article 5 

Article 6 

Article 7 

Article 8 

Article 9 

Article 10 

Article 11 

Annex I, Part A 

Annex II 

Annex III 

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