Brussels, 12/09/2012 (Agence Europe) - In exchange for a number of amendments, the European Parliament will support the European Commission's draft to toughen up current rules on interest and royalty payments by supporting adoption of the own-opinion report of Ildikó Gáll-Pelcz (EPP, Hungary) on the recasting of the directive on the common tax system for interest and royalty payments between associated companies (directive 2003/49/EC). The objective of the legislative recasting is to prevent tax evasion strategies set up for some companies.
In its amendments, the EP particularly calls on member states to ensure good cooperation and coordination between their tax systems, in an effort to prevent involuntary tax avoidance and tax evasion; demands implementation of a minimum rate for crossed interest payments, in an effort to reduce fiscal competition and increase the room of manoeuvre for member states to tax companies; stipulate exemption criteria before allowing companies to benefit from the advantages of the directive (taxation in only one country) by highlighting the need to get rid of loopholes (exemptions, replacement or substitutions through the payment of another kind of tax). (FG/trans/fl)