Tag Archives: Tax system

General arrangements for the holding and movement of products subject to excise duty

General arrangements for the holding and movement of products subject to excise duty

Outline of the Community (European Union) legislation about General arrangements for the holding and movement of products subject to excise duty

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

General arrangements for the holding and movement of products subject to excise duty

Document or Iniciative

Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC [See amending act(s)].

Summary

This directive establishes the general arrangements for excise duties which affect the consumption of:

  • energy products and electricity covered by Directive 2003/96/EC;
  • alcohol and alcoholic beverages covered by Directives 92/83/EEC and 92/84/EEC;
  • manufactured tobacco covered by Directive 95/59/EC, Directive 92/79/EC and Directive 92/80/EC.

These products are subject to excise duties at the time of:

  • their production, including, where applicable, their extraction, within the European Union (EU);
  • their importation into the EU.

On condition that they do not give rise to formalities on the crossing of frontiers within the EU, EU countries may also levy taxes on:

  • products other than excise goods;
  • the supply of services, including those relating to excise goods, which cannot be characterised as turnover taxes.

This directive applies to the territory of the EU with the exception of certain territories such as:

  • the Canary Islands;
  • the French overseas departments;
  • the Åland Islands;
  • the Channel Islands.

Chargeability, reimbursement, exemption

Excise duties are chargeable at the time of release for consumption in the EU country concerned. The person liable to pay the excise duty is generally the authorised warehousekeeper or the registered consignee.

EU countries may remit or refund excise duty on excise goods which have been released for consumption. EU countries are free to fix the relevant conditions, so long as the result does not create a new class of exemption (see next paragraph).

Excise goods are exempted from payment of excise duty where they are intended to be used:

  • in the context of diplomatic or consular relations;
  • by international organisations;
  • by the armed forces of a State;
  • by the British armed forces stationed in Cyprus;
  • under an agreement concluded with non-EU countries or international organisations.

EU countries may also exempt from payment of excise duty excise goods supplied by tax-free shops * which are carried away in the personal luggage of travellers to a non-EU country by flight or sea-crossing.

Production, processing and holding

The rules concerning the production, processing and holding of excise goods are determined by each EU country. These operations, where the excise duty has not yet been paid, must take place in a tax warehouse *.

Movement of excise goods under suspension of excise duty

Excise goods may be moved under a duty suspension arrangement within the EU, from a tax warehouse or from a place of importation to another tax warehouse, an authorised consignee *, a place of exportation from the EU or a beneficiary of the exemption referred to above (diplomatic or consular relations, international organisations, armed forces, etc.). A movement of excise goods must in principle take place under cover of an electronic administrative document.

The competent authorities of the EU country of dispatch may request from the authorised warehousekeeper or registered consignor * a guarantee which covers the risks inherent in the movement under suspension of excise duty. In principle the guarantee can be provided by another party

Movements and taxation of excise goods after release for consumption

Excise duties may be charged only in the EU country in which the goods are acquired by a private individual for his own personal use and transported from one EU country to another by him. To determine whether the excise goods are intended for a private individual, EU countries take account of:

  • the commercial status of the holder of the goods;
  • the place where the goods are located;
  • any document relating to the goods;
  • the nature of the goods;
  • the quantity of the goods.

Where excise goods intended for consumption in an EU country are held for commercial purposes in another EU country, the goods are subject to the excise duties of the latter country. Excise duties paid in the first EU country may be reimbursed.

In the case of distance selling from one EU country to another, the vendor or his agent must pay excise duty in the EU country of destination.

EU countries may require that excise goods carry tax markings or national identification marks.

Directive 2008/118/EC repeals Directive 92/12/EC from 1 April 2010.

Key terms of the Act
  • Tax-free shop: any establishment situated within an airport or port which is authorised to sell tax-free to travellers leaving the EU.
  • Tax warehouse: a place where excise goods are produced, processed, held, received or dispatched under duty suspension arrangements by an authorised warehousekeeper in the course of his business, subject to certain conditions laid down by the competent authorities of the EU country where the tax warehouse is located.
  • Registered consignee: a natural or legal person authorised by the competent authorities of the EU country of destination, in the course of his business and under the conditions fixed by those authorities, to receive excise goods moving under a duty suspension arrangement from another EU country.
  • Registered consignor: a natural or legal person authorised by the competent authorities of the EU country of importation, in the course of his business and under the conditions fixed by those authorities, to only dispatch excise goods under a duty suspension arrangement upon their release for free circulation.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2008/118/EC

 15.1.2009

1.4.2010 

OJ L 9 of 14.1.2009 

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Directive 2010/12/EU

27.2.2010

1.1.2011

OJ L 50 of 27.2.2010

Recovery of claims relating to taxes, duties and other measures

Recovery of claims relating to taxes, duties and other measures

Outline of the Community (European Union) legislation about Recovery of claims relating to taxes, duties and other measures

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

Recovery of claims relating to taxes, duties and other measures

Document or Iniciative

Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures.

Summary

This directive applies to claims relating to:

  • all taxes and duties levied by or on behalf of any European Union (EU) country or on behalf of the EU as a whole;
  • refunds, interventions and other measures which contribute to the total or partial financing of the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD);
  • levies and other duties on the sugar sector market.

EU countries must notify the Commission of its competent national authority or authorities by 20 May 2010. The Commission will then publish a list of all competent national authorities in the Official Journal. Each competent authority must designate a central liaison office which will be responsible for contacts with other EU countries in this field.

Request for information

A competent authority is obliged to provide another competent authority with any information relevant to that applicant authority in the recovery of its claims, except if:

  • the requested authority would not be able to obtain such information for the recovery of similar claims occurring in its own country;
  • the information would disclose any commercial, industrial or professional secrets;
  • the disclosure of the information would put at risk the security or contravene the public policy of the requested EU country.

Request for notification of documents

When requested for notification of documents relating to claims, the requested authority must notify to the addressee all documents which emanate from the applicant EU country relating to a claim or to its recovery.

The request for notification must include relevant information, such as the name and address of the addressee, the purpose of the notification, a description of the nature and amount of the claim, and the contact details of the offices responsible for the documents and for obtaining further information.

Recovery procedures

Any available appropriate recovery procedures must be applied before the applicant authority makes a request for recovery, except where:

  • it is evident that there are insufficient or no assets for recovery in the applicant EU country but that the person concerned has the necessary assets in the requested EU country;
  • it would result in disproportionate difficulty.

Any request for recovery must be accompanied by a uniform instrument permitting enforcement in the requested EU country.

The requested competent authority will employ the powers and procedures provided under the laws, regulations or administrative provisions of the requested EU country regarding claims on the same or similar tax or duty. If the requested authority does not consider that the same or similar taxes or duties are applicable in the requested EU country, it shall instead apply the rules relating to tax levied on personal income.

Disputes

Disputes relating to the claim, the initial or uniform instrument permitting enforcement, and the validity of a notification by the applicant authority are the responsibility of the competent authorities of the applicant EU country. Disputes relating to the validity of a notification made by a competent authority of the requested EU country will be brought before the competent authority of that EU country.

The applicant authority may make a request for recovery of a contested claim. If the contestation is successful, the applicant authority will be responsible for the reimbursement of the amount recovered, in addition to any compensation due.

Amendment or withdrawal of the request for recovery assistance

The applicant authority must immediately notify the requested authority of any amendment to or withdrawal of its request for recovery, detailing the reasons for amendment or withdrawal.

Request for precautionary measures

Where the claim or the instrument permitting enforcement in the applicant EU country is contested at the time when the request is made, the requested authority will take precautionary measures, in accordance with its national law, to ensure recovery when requested to do so by the applicant authority.

Limits to the requested authority’s obligations

The requested authority is not obliged to grant the recovery assistance if:

  • recovery of the claim would result in serious economic or social difficulties in the requested EU country;
  • the initial request for assistance relates to claims more than 5 years old;
  • the total sum of the claims is less than EUR 1 5000.

General provisions

Any information and documents disclosed under this directive will be covered by the obligation of official secrecy and will therefore be protected under the appropriate national law of the EU country which received it.

This directive repeals Directive 2008/55/EC from 1 January 2012. References to the repealed directive will be understood as references to this directive.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Council Directive 2010/24/EU

20.4.2010

31.12.2011

OJ L84 of 31.3.2010

Refund of VAT: taxable persons established in another EU country

Refund of VAT: taxable persons established in another EU country

Outline of the Community (European Union) legislation about Refund of VAT: taxable persons established in another EU country

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

Refund of VAT: taxable persons established in another EU country

Document or Iniciative

Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State [See amending act(s)].

Summary

This directive lays down the detailed rules for the refund of value added tax (VAT), provided for in Directive 2006/112/EC, to taxable persons not established in the European Union (EU) country of refund * but established in another EU country.

This directive applies to any taxable person not established in the EU country of refund who, during the refund period:

  • has not had in the EU country of refund, the seat of his economic activity, a fixed establishment from which business transactions were effected or, in the absence of such a seat or fixed establishment, his domicile or normal place of residence;
  • has not supplied any goods or services in the EU country of refund, with the exception of the supply of certain transport services and the supply of goods and services to a person who is liable to pay VAT.

Directive 2006/112/EC establishes the transactions which EU countries may exempt from VAT. EU countries must therefore refund to any taxable person not established in the country of refund any VAT charged in respect of goods or services supplied to him by other taxable persons in that EU country or in respect of the importation of goods into that country, when used for the purposes of the transactions listed in Directive 2006/112/EC.

To be eligible for a refund in the EU country of refund, a taxable person not established in this country must carry out transactions giving rise to a right of deduction in the EU country of establishment. When a taxable person not established in the EU country of refund carries out in his EU country of establishment both transactions producing a right of deduction and transactions not producing a right of deduction in that country, the EU country of refund will only pay the proportion of refundable VAT.

Refund application

This directive establishes a fully electronic procedure, whereby the taxable person not established in the EU country of refund addresses an electronic refund application to the EU country of refund and submits it to his EU country of establishment via the electronic portal of that country. The refund application relates to the purchase of goods or services which was invoiced during the refund period, and the importation of goods during the refund period.

The refund application must be submitted to the EU country of establishment by the 30 September of the calendar year following the refund period. The amount of VAT refund applied for must not be less than EUR 400. If the country is late in making the refund payment, the applicant will be entitled to interest on the amount of the refund.

This directive repeals Directive 79/1072/EEC, however its provisions continue to apply to refund applications submitted before 1 January 2010.

Key terms used in the act
  • EU country of refund: the EU country in which the VAT was charged to the taxable person in respect of goods or services supplied to him by other taxable persons in that EU country or in respect of the importation of goods into that EU country.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2008/9/EC

20.2.2008

1.1.2010

OJ L 44, 20.2.2008

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 2010/66/EU

21.10.2010

OJ L 275, 20.10.2010

Successive amendments and corrections to Directive 2008/9/EC have been incorporated into the basic text. This consolidated version is for reference only.

Related Acts

Commission Regulation (EC) No 1174/2009 of 30 November 2009 laying down rules for the implementation of Articles 34a and 37 of Council Regulation (EC) No 1798/2003 as regards refunds of value added tax under Council Directive 2008/9/EC [Official Journal 314 of 1.12.2009].

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

Fees Payable to the Office for Harmonisation in the Internal Market

Fees Payable to the Office for Harmonisation in the Internal Market

Outline of the Community (European Union) legislation about Fees Payable to the Office for Harmonisation in the Internal Market

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Intellectual property

Fees Payable to the Office for Harmonisation in the Internal Market (OHIM)

Document or Iniciative

Commission Regulation (EC) No 2869/95 of 13 December 1995 on the fees payable to the Office for Harmonisation in the Internal Market (Trade Marks and Designs) [See amending acts].

Summary

The fees governed by the Regulation include an application fee for a Community trade mark, a fee for opposition to a Community trade mark, registration and renewal fees, a fee for an application for revocation or for a declaration of invalidity, an appeal fee and a fee for the cancellation of the registration of a licence or other right.

Payment of fees

Fees and charges due to the Office must be paid:

  • by payment or transfer to a bank account held by the Office;
  • by delivery or remittance of cheques made payable to the Office; or
  • in cash.

Currency of payment

All fees and all costs relating to a Community trade mark application must be paid in euros.

Payment details

For all payments, the name of the person making the payment must be indicated and the following information must be provided:

  • when paying the application fee, the purpose of the payment, i.e. “application fee”;
  • when paying the registration fee, the file number of the application being registered and the purpose of the payment, i.e. “registration fee”;
  • when paying the opposition fee, the file number of the application, the name of the applicant for a Community trade mark whose application is being opposed and the purpose of the payment, i.e. “opposition fee”;
  • when paying the revocation or invalidity fee, the registration number, the name of the holder of the Community trade mark against which the application is directed and the purpose of the payment, i.e. “revocation fee” or “invalidity fee”.

Deemed date of payment

The date on which a payment is considered to have been made to the Office is as follows:

  • for a deposit or transfer: the date on which the amount of the payment or transfer is actually entered in a bank account held by the Office;
  • for delivery or remittance of cheques: the date on which the cheque is received by the Office, provided that it is honoured;
  • for a cash payment: the date on which the cash payment is received.

Insufficient payment

In principle, a payment deadline is deemed to have been met only if the full amount of the fee has been paid in due time. If the fee is not paid in full, the amount paid will be refunded after the payment deadline has passed.

Refund of insignificant amounts

Where an excessive sum is paid to cover a fee, the excess will not be refunded if the amount is insignificant and the party concerned has not expressly requested a refund. (It is for the President to determine what constitutes an insignificant amount.)

Refund of fees following refusal of protection

If protection is refused the fee to be refunded is shown in the table in Article 2. In the case of an individual mark the fee to be refunded is €1100, plus €200 for each class of goods and services. In the case of a collective mark the fee to be refunded is €2200 plus €400.

If the refusal concerns part of the goods and services, the fee to be refunded is equal to 50% of the difference between the fees per class paid and the fees per class which would have been payable.

Reduction in the fees payable to the OHIM from 2005 and 2009

The Commission decided to reduce the fees payable to the OHIM by adopting Regulation (EC) No 1687/2005 of 14 October 2005, which is designed to reduce the cost of protecting intellectual property for businesses operating in the EU’s single market. This reduction in fees is the result of productivity gains at the OHIM, which therefore wanted to pass the savings on to business as a whole.

Regulation (EC) No 355/2009 of March 2009 reduces the fees charged by the OHIM and simplifies the fee structure by fixing the amount of the registration fee for a Community trade mark at zero. Only the application fee need be paid. The registration fee is also fixed at zero in relation to international registrations. These reductions in fees are carried out in order to ensure that the OHIM budget is balanced while fostering access to the Community trade mark system for users.

The consequences of the reductions made in 2009 include the following:

  • entreprises will only have to pay an application fee of €1050 instead of the €1750 that it previously cost to apply for and register a Community trade mark;
  • applications made by Internet will be charged at an even lower rate, which will be €900 instead of the €1600 payable in total at present.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal

Regulation (EC) No 2869/95

22.12.1995

_

OJ L 303, 15.12.1995

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 781/2004

1.10.2004

OJ L 123 of 27.4.2004

Regulation (EC) No 1042/2005

25.7.2005

OJ L 172 of 5.7.2005

Regulation (EC) No 1687/2005

22.10.2005

OJ L 271 of 15.10.2005

Regulation (EC) No 355/2009

1.5.2009

OJ L 109 of 30.4.2009

Related Acts

Communication of 22 December 2006 from the Commission to the European Parliament and the Council – The financial perspectives of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) [COM(2006) 865 final – Not published in the Official Journal].
This Communication deals with the long-term management of the financing of the OHIM. The OHIM provides EU-wide protection for trade marks and designs for companies from all over the world. It is funded by the businesses that use its services. The OHIM is generating substantial cash reserves, particularly as a result of the ever increasing number of applications for trade marks and designs. Despite fee reductions in 2005, cash reserves are expected to increase still further in the next few years. However, the annual surplus cannot be allowed to continue to exceed the financial resources needed by the Office to operate. The Commission has therefore proposed a periodic review of the fees payable for Community trade marks in order to ensure that the OHIM has a more balanced budget.

Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark [Official Journal L 78/1 of 24.3.2009].

Community framework for the taxation of energy products and electricity

Community framework for the taxation of energy products and electricity

Outline of the Community (European Union) legislation about Community framework for the taxation of energy products and electricity

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Taxation

Community framework for the taxation of energy products and electricity

Document or Iniciative

Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity [See amending acts].

Summary

Energy products and electricity are only taxed when they are used as motor or heating fuel, and not when they are used as raw materials or for the purposes of chemical reduction or in electrolytic and metallurgical processes.

On the basis of this principle, the directive sets minimum rates of taxation for motor fuel, motor fuel for industrial or commercial use, heating fuel and electricity. The “levels of taxation” * applied by the European Union (EU) countries may not be lower than the minimum rates set in the directive.

The minimum levels of taxation applicable to motor fuels are the following:

Current minimum excise rates
Petrol (€/1000 l.)

421

Unleaded petrol (€/1000 l.)

359

Diesel (€/1000 l.)

330

Kerosene (€/1000 l.)

330

LPG (€/1000 l.)

125

Natural gas (€/gigajoule)

2.6

(The volumes are measured at a temperature of 15 °C).

No later than 1 January 2012, the Council acting unanimously after consulting the European Parliament must, on the basis of a report and a proposal from the Commission, decide upon the minimum levels of taxation applicable to gas-oil for a further period beginning on 1 January 2013.

The directive allows EU countries to differentiate between commercial and non-commercial use of gas-oil used as propellant, provided that the EU minimum levels are observed and the rate for commercial gas-oil used as propellant * does not fall below the national level of taxation in force on 1 January 2003, notwithstanding any derogations for this use laid down in the directive.

This differentiation enables EU countries to reduce the gap between the level of excise duty applicable to non-commercial gas-oil used in cars and that applicable to petrol, since there is no environmental or other justification for the lower minimum rate currently applicable to the use of gas-oil in cars.

The minimum levels of taxation applicable to fuels for industrial or commercial use are the following:

Current minimum excise rates

Diesel (€/1000 l.)

21

Kerosene (€/1000 l.)

21

LPG (€/1000 kg.)

41

Natural gas (€/gigajoule)

0.3

(The volumes are measured at a temperature of 15 °C).

The directive specifies that industrial and commercial uses are:

  • agricultural, horticultural or piscicultural works, and forestry;
  • stationary motors;
  • plant and machinery used in construction, civil engineering and public works;
  • vehicles intended for use off the public roadway.

The minimum levels of taxation applicable to heating fuels and electricity are the following:

Current minimum excise rates
(business use)
Current minimum excise rates
(non-business use)

Diesel (€/1000 l.)

21

21

Heavy fuel oil (€/1000 kg.)

15

15

Kerosene (€/1000 l.)

0

0

LPG (€/1000 kg.)

0

0

Natural gas (€/gigajoule)

0.15

0.3

Coal and coke (€/gigajoule)

0.15

0.3

Electricity (€/MWh)

0.5

1.0

(The volumes are measured at a temperature of 15 °C).

Differentiated rates of taxation

Provided that they comply with the minimum levels of taxation prescribed by the directive and are compatible with EU law, differentiated rates of taxation may be applied by EU countries, under fiscal control, in the following cases:

  • when the differentiated rates are directly linked to product quality;
  • when the differentiated rates depend on quantitative consumption levels for electricity and energy products used for heating purposes;
  • for the following uses: local public passenger transport (including taxis), waste collection, armed forces and public administration, disabled people, ambulances;
  • between business and non-business use, for the energy products and electricity referred to above.

Exemptions and reductions

The following are exempt from taxation:

  • energy products and electricity used to produce electricity and electricity used to maintain the ability to produce electricity. However, EU countries may, for reasons of environmental policy, subject these products to taxation;
  • energy products supplied for use as fuel for the purpose of air navigation other than in private pleasure-flying;
  • energy products supplied for use as fuel for the purposes of navigation within EU waters, including fishing, other than private pleasure craft, and electricity produced on board a craft.

EU countries may limit the scope of the last two exemptions to international and intra-EU transport. Therefore, for all air or sea transport within an EU country or between two EU countries that have signed a bilateral agreement to this effect, the EU countries may apply a level of taxation lower than the minimum set by the directive.

EU countries may apply total or partial exemptions or reductions in the level of taxation to, inter alia:

  • energy products used under fiscal control in the field of pilot projects for the technological development of more environmentally-friendly products or in relation to fuels from renewable sources;
  • biofuels;
  • forms of energy which are of solar, wind, tidal or geothermal origin, or from biomass * or waste;
  • energy products and electricity used for the carriage of goods and passengers by rail, metro, tram and trolley bus;
  • energy products supplied for use as fuel for navigation on inland waterways (including fishing) other than in private pleasure craft, and electricity produced on board a craft;
  • natural gas and LPG used as propellants.

The directive takes account of the competitiveness of businesses by providing for measures to alleviate the tax burden on energy intensive businesses and/or businesses * that undertake to achieve environmental protection objectives or to improvements in energy efficiency.

It also provides that EU countries may refund, fully or in part, taxes paid by businesses that have invested in the rationalisation of their energy use. This refund may be as much as 100 % in the case of energy intensive businesses, and up to 50 % for other businesses.

Transitional periods

For some EU countries the directive defines transitional periods during which they are required to gradually reduce the gap between their rates and the new minimum rates of taxation. However, when the difference between the national rate and the minimum rate does not exceed 3 % of the minimum rate, the EU country may wait until the end of the period to adjust its national level.

Key terms used in the act
  • Level of taxation: the total charge levied in respect of all indirect taxes (except VAT) calculated directly or indirectly on the quantity of energy products and electricity at the time of release for consumption.
  • Commercial gas-oil used as propellant: gas-oil used as propellant for the carriage of goods for hire or reward, or on own account, by motor vehicles or articulated vehicle combinations intended exclusively for the carriage of goods by road and with a maximum permissible gross laden weight of not less than 7.5 tonnes and for the carriage of passengers, whether by regular or occasional service, by a motor vehicle of category M2 or category M3, as defined in Council Directive 70/156/EEC of 6 February 1970 on the approximation of the laws of the EU countries relating to the type-approval of motor vehicles and their trailers.
  • Biomass: the biodegradable fraction of products, waste and residues from agriculture (including vegetal and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste.
  • Energy-intensive business: a business entity where either the purchases of energy products and electricity amount to at least 3.0 % of the production value, or the national energy tax payable amounts to at least 0.5 % of the added value.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Directive 2003/96/EC

31.10.2003

31.12.2003

OJ L 283 of 31.10.2003

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Directive 2004/74/EC

1.5.2004

1.5.2004

OJ L 195 of 2.6.2004

Directive 2004/75/EC

1.5.2004

1.5.2004

OJ L 195 of 2.6.2004

Successive amendments and corrections to Directive 2003/96/EC have been incorporated into the basic text. This consolidated version is for reference only.

Common system of taxation: mergers, divisions, transfers of assets, exchanges of shares and transfer of the registered office of an SE or SCE

Common system of taxation: mergers, divisions, transfers of assets, exchanges of shares and transfer of the registered office of an SE or SCE

Outline of the Community (European Union) legislation about Common system of taxation: mergers, divisions, transfers of assets, exchanges of shares and transfer of the registered office of an SE or SCE

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Company law

Common system of taxation: mergers, divisions, transfers of assets, exchanges of shares and transfer of the registered office of an SE or SCE

Document or Iniciative

Council Directive 2009/133/EC of 19 October 2009 on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different Member States and to the transfer of the registered office of an SE or SCE between Member States.

Summary

This Directive applies to:

  • mergers, divisions, transfers of assets and exchanges of shares in which companies from two or more Member States are involved;
  • the transfer of the registered office between Member States of a Societas Europaea (European Company) (SE) or a European Cooperative Society (SCE).

Rules applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares

A merger, division or partial division does not give rise to any taxation of capital gains -calculated by reference to the difference between the real values of the assets and liabilities transferred and their values for tax purposes – at the time of the operation in question but only when such gains are actually realized.

Member States are required to take the necessary measures to ensure that provisions or reserves partly or wholly exempt from tax may be carried over by the permanent establishments of the receiving company which are situated in the Member State of the transferring company.

The allotment of securities representing the capital of the receiving or acquiring company to a shareholder of the transferring or acquired company must not give rise to any taxation of the income, profits or capital gains of that shareholder.

Special case of the transfer of a stable establishment

Where the assets transferred in a merger, a division or a transfer of assets include a permanent establishment of the transferring company which is situated in a Member State other than that of the transferring company, the Member State of the transferring company must renounce any right to tax that permanent establishment.

Special case of transparent entities

Where a Member State considers a non-resident transferring or acquired company to be fiscally transparent, it is not required to apply the provisions of this Directive when taxing a direct or indirect shareholder of that company in respect of the income, profits or capital gains of that company.

Rules applicable to the transfer of the registered office of an SE or SCE

Where an SE or an SCE transfers its registered office from one Member State to another or becomes resident in another Member State, that transfer shall not give rise to any taxation of the income, profits or capital gains of the shareholders. However, Member States may tax the gain arising out of the subsequent transfer of the securities representing the capital of the SE or of the SCE that transfers its registered office.

In the same case, Member States shall take the necessary measures to ensure that, where provisions or reserves properly constituted by the SE or the SCE before the transfer of the registered office are partly or wholly exempt from tax and are not derived from permanent establishments abroad, such provisions or reserves may be carried over, with the same tax exemption, by a permanent establishment of the SE or the SCE which is situated within the territory of the Member State from which the registered office was transferred.

This Directive repeals Directive 90/434/EC.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2009/133/EC

15.12.2099

OJ L 310, 25.11.2009