CELEX: 51993PC0196
Language: en
Date: 1993-06-10
Title: Amended proposal for a COUNCIL DIRECTIVE on a common system of taxation applicable to interest and royalty payments made between parent companies and subsidiaries in different Member States

COMMISSION OF THE EUROPEAN COMMUNITIES
                                               COM(93)   196final
                                                Brussels, 10 June 1993
%:
                          Amended proposal for a
                             COUNCIL DIRECTIVE
                on a common system of taxation applicable to
                 interest and royalty payments made between
        parent companies and subsidiaries in different Member States
         (presented by the Commission pursuant to Article 149(3)
                            of the EEC-Treaty)
 ---pagebreak---                                    - 1 -
                          EXPLANATORY MEMORANDUM
Introduction
On 28 November 1990 the Commission presented to the Council a proposal
for a Directive on a common system of taxation applicable to interest
and royalty payments made between parent companies and subsidiaries in
different Member States 1 .
Parliament and the Economic and Social Committee, which were consulted
on the proposal, adopted favourable opinions on 14 February 1992 2 and
20 March 1991 3 respectively.
Of the amendments requested by Parliament, the Commission has adopted
one expanding the definitions of interest and royalty payments in order
to ensure that the Directive applies more widely to everything regarded
by Member States as interest and royalty payments (Amendment No 4 ) .
Amendment No 11, which aims at inserting into Article 8 of the proposal
a provision requiring Member States to include a reference to the
Directive, notably in national provisions for the prevention of abuse,
at the time of transposition into national law, has not been taken up
by the Commission   since the text of the proposal already applies to
all national provisions and hence to those relating to the prevention
of abuse.
1   0J C 53, 28.2.1991.
2   0J C 67, 16.3.1992.
3   0J C 120, 6.5.1991.
 ---pagebreak---                                  - 2 -
                  COMMENTARY ON THE PROPOSED AMENDMENT
ArtW 2
The proposed amendment is designed to ensure that the Directive applies
fully to all payments regarded by Member States as interest and royalty
payments, either under a bNateral convention or, in the absence of
such a convention, on the basis of the national tax laws of a
Member State.
 ---pagebreak---                                  - 3 -
          Amendment to the proposal for a Council Directive
      on a common system of taxation applicable to interest and
          royalty payments made between parent companies and
                subsidiaries in different Member States
              (presented by the Commission to the Council
             pursuant to Article 149(3) of the EEC Treaty)
1. Article 2 becomes paragraph 1 of Article 2.
2. The following paragraph 2 is added to Article 2:
   "2. In addition to the provisions in paragraph 1, all other
       payments regarded as interest or royalty payments, either under
       a double taxation convention in force between the Member State
       of the debtor and the Member State of the recipient or, in the
       absence of such a convention, by the tax laws of the
       Member State of the debtor, shall be treated as such for the
       purposes of this Directive."
 ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM (93) 196 final
                                                      DOCUMENTS
EN                                                                              09
                                 Catalogue number : CB-CO-93-222-EN-C
                                                             ISBN 92-77-55655-2
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