Brussels, 09/12/2014 (Agence Europe) - Following the lifting of vetoes by the Netherlands, Belgium and the United Kingdom, EU finance ministers reached broad agreement on Tuesday 9 December on the anti-abuse clause of the parent company-subsidiary directive (2011/96/EU). This is a de minimis clause, but the member states are free to introduce tighter rules. Under the clause, government will not have to grant benefits under the directive to arrangements or series of arrangements that are not genuine but were set up to gain tax benefits and do not reflect economic reality.
The original directive was designed to ensure that the subsidiaries of the same company in a number of member states were not taxed twice on the same income, requiring countries to grant tax exemption to profits paid by a subsidiary to its parent company in another country. In November 2013, the European Commission unveiled a revised version of the directive to prevent companies from avoiding tax by exploiting the differences between different countries' tax systems when it comes to how intragroup payments are dealt with. Agreement on the initial part of the directive was reached in June 2014 (see EUROPE 11105). Following adoption of the new agreement at an upcoming Council meeting, the member states will have until 31 December 2015 to transpose the measures into their legislation. (EL)