11.3.2011 EN Official Journal of the European Union L 64/1 COUNCIL DIRECTIVE 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 113 and 115 thereof, Having regard to the proposal from the European Commission, Having regard to the opinion of the European Parliament (1), Having regard to the opinion of the European Economic and Social Committee (2), Acting in accordance with a special legislative procedure, Whereas: (1) The Member States’ need for mutual assistance in the field of taxation is growing rapidly in a globalised era. There is a tremendous development of the mobility of taxpayers, of the number of cross-border transactions and of the internationalisation of financial instruments, which makes it difficult for Member States to assess taxes due properly. This increasing difficulty affects the functioning of taxation systems and entails double taxation, which itself incites tax fraud and tax evasion, while the powers of controls remain at national level. It thus jeopardises the functioning of the internal market. (2) Therefore, a single Member State cannot manage its internal taxation system, especially as regards direct taxation, without receiving information from other Member States. In order to overcome the negative effects of this phenomenon, it is indispensable to develop new administrative cooperation between the Member States’ tax administrations. There is a need for instruments likely to create confidence between Member States, by setting up the same rules, obligations and rights for all Member States. (3) Therefore, a completely new approach should be taken by creating a new text to give Member States the power to efficiently cooperate at international level to overcome the negative effects of an ever-increasing globalisation on the internal market. (4) In such a context, the existing Council Directive 77/799/EEC of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation and taxation of insurance premiums (3) no longer provides for appropriate measures. Its deep weaknesses have been looked into by the Ad hoc Council Working Party on Tax Fraud in its report of 22 May 2000 and more recently by the Commission Communication on Preventing and Combating Corporate and Financial Malpractice of 27 September 2004 and the Commission Communication concerning the need to develop a coordinated strategy to improve the fight against fiscal fraud of 31 May 2006. (5) Directive 77/799/EEC, even with its later amendments, was designed in a different context to current internal market requirements and is no longer able to meet the new requirements of administrative cooperation. (6) Due to the number and the importance of adaptations to be made to Directive 77/799/EEC, a mere amendment thereof would not be sufficient to fulfil the objectives described above. Directive 77/799/EEC should therefore be repealed and replaced by a new legal instrument. That instrument should apply to direct taxes and indirect taxes that are not yet covered by other Union legislation. To this end, this new Directive is considered to be the proper instrument in terms of effective administrative cooperation. (7) This Directive builds on the achievements of Directive 77/799/EEC but provides for clearer and more precise rules governing administrative cooperation between Member States where necessary, in order to establish, especially as regards the exchange of information, a wider scope of administrative cooperation between Member States. Clearer rules should also make it possible in particular to cover all legal and natural persons in the Union, taking into account the ever-increasing range of legal arrangements, including not only traditional arrangements such as trusts, foundations and investment funds, but any new instrument which may be set up by taxpayers in the Member States. (8) There should be more direct contact between Member States’ local or national offices in charge of administrative cooperation, with communication between central liaison offices being the rule. The lack of direct contacts leads to inefficiency, under-use of the arrangements for administrative cooperation and delays in communication. Provision should therefore be made to bring about more direct contacts between services with a view to making cooperation more efficient and faster. The assignment of competences to the liaison departments should be deferred to the national provisions of each Member State. (9) Member States should exchange information concerning particular cases where requested by another Member State and should make the necessary enquiries to obtain such information. The standard of ‘foreseeable relevance’ is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that Member States are not at liberty to engage in ‘fishing expeditions’ or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. While Article 20 of this Directive contains procedural requirements, those provisions need to be interpreted liberally in order not to frustrate the effective exchange of information. (10) It is recognised that the mandatory automatic exchange of information without preconditions is the most effective means of enhancing the correct assessment of taxes in cross-border situations and of fighting fraud. To that end, a step-by-step approach should therefore be followed starting with the automatic exchange of available information on five categories and reviewing the relevant provisions after a report by the Commission. (11) The spontaneous exchange of information between Member States should also be strengthened and encouraged. (12) Time limits for the provision of information under this Directive should be laid down in order to ensure that the information exchange is timely and thus effective. (13) It is important that officials of the tax administration of one Member State are allowed to be present in the territory of another Member State. (14) Since the tax situation of one or more persons liable to tax established in several Member States is often of common or complementary interest, it should be made possible for simultaneous controls to be carried out on such persons by two or more Member States, by mutual agreement and on a voluntary basis. (15) In view of the legal requirement in certain Member States that a taxpayer be notified of decisions and instruments concerning his tax liability and of the ensuing difficulties for the tax authorities, including cases where the taxpayer has relocated to another Member State, it is desirable that, in such circumstances, the tax authorities should be able to call upon the cooperation of the competent authorities of the Member State to which the taxpayer has relocated. (16) Feedback on information sent will encourage administrative cooperation between Member States. (17) Collaboration between the Member States and the Commission is necessary for the permanent study of cooperation procedures and the sharing of experience and best practices in the fields considered. (18) It is important for the efficiency of administrative cooperation that information and documents obtained under this Directive could, subject to the restrictions laid down in this Directive, be used by the Member State that received them also for other purposes. It is also important that Member States could transmit that information to a third country, under certain conditions. (19) The situations in which a requested Member State may refuse to provide information should be clearly defined and limited, taking into account certain private interests which should be protected as well as the public interest. (20) However, a Member State should not refuse to transmit information because it has no domestic interest or because the information is held by a bank, other financial institution, nominee or person acting in an agency or fiduciary capacity or because it relates to ownership interests in a person. (21) This Directive contains minimum rules and should therefore not affect Member States’ right to enter into wider cooperation with other Member States under their national legislation or in the framework of bilateral or multilateral agreements concluded with other Member States. (22) It should also be made clear that where a Member State provides a wider cooperation to a third country than is provided for under this Directive, it should not refuse to provide such wider cooperation to other Member States wishing to enter into such mutual wider cooperation. (23) The exchange of information should be made through standardised forms, formats and channels of communication. (24) An evaluation of the effectiveness of administrative cooperation should be made, especially on the basis of statistics. (25) The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (4). (26) In accordance with point 34 of the Interinstitutional Agreement on better law-making, Member States are encouraged to draw up, for themselves and in the interests of the Union, their own tables illustrating, as far as possible, the correlation between this Directive and the transposition measures, and to make them public. (27) All exchange of information referred to in this Directive is subject to the provisions implementing Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (5) and to Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (6). However, it is appropriate to consider limitations of certain rights and obligations laid down by Directive 95/46/EC in order to safeguard the interests referred to in Article 13(1)(e) of that Directive. Such limitations are necessary and proportionate in view of the potential loss of revenue for Member States and the crucial importance of information covered by this Directive for the effectiveness of the fight against fraud. (28) This Directive respects the fundamental rights and observes the principles which are recognised in particular by the Charter of Fundamental Rights of the European Union. (29) Since the objective of this Directive, namely the efficient administrative cooperation between Member States to overcome the negative effects of the increasing globalisation on the internal market, cannot be sufficiently achieved by the Member States and can therefore, by reason of the uniformity and effectiveness required, be better achieved at the level of the Union, the 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, HAS ADOPTED THIS DIRECTIVE: CHAPTER I GENERAL PROVISIONS Article 1 Subject matter 1. This Directive lays down the rules and procedures under which the Member States shall cooperate with each other with a view to exchanging information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Member States concerning the taxes referred to in Article 2. 2. This Directive also lays down provisions for the exchange of information referred to in paragraph 1 by electronic means, as well as rules and procedures under which the Member States and the Commission are to cooperate on matters concerning coordination and evaluation. 3. This Directive shall not affect the application in the Member States of the rules on mutual assistance in criminal matters. It shall also be without prejudice to the fulfilment of any obligations of the Member States in relation to wider administrative cooperation ensuing from other legal instruments, including bilateral or multilateral agreements. Article 2 Scope 1. This Directive shall apply to all taxes of any kind levied by, or on behalf of, a Member State or the Member State’s territorial or administrative subdivisions, including the local authorities. 2. Notwithstanding paragraph 1, this Directive shall not apply to value added tax and customs duties, or to excise duties covered by other Union legislation on administrative cooperation between Member States. This Directive shall also not apply to compulsory social security contributions payable to the Member State or a subdivision of the Member State or to social security institutions established under public law. 3. In no case shall the taxes referred to in paragraph 1 be construed as including: (a) fees, such as for certificates and other documents issued by public authorities; or (b) dues of a contractual nature, such as consideration for public utilities. 4. This Directive shall apply to the taxes referred to in paragraph 1 levied within the territory to which the Treaties apply by virtue of Article 52 of the Treaty on the European Union. Article 3 Definitions For the purposes of this Directive the following definitions shall apply: 1. ‘competent authority’ of a Member State means the authority which has been designated as such by that Member State. When acting pursuant to this Directive, the central liaison office, a liaison department or a competent official shall also be deemed to be competent authorities by delegation according to Article 4; 2. ‘central liaison office’ means the office which has been designated as such with principal responsibility for contacts with other Member States in the field of administrative cooperation; 3. ‘liaison department’ means any office other than the central liaison office which has been designated as such to directly exchange information pursuant to this Directive; 4. ‘competent official’ means any official who is authorised to directly exchange information pursuant to this Directive; 5. ‘requesting authority’ means the central liaison office, a liaison department or any competent official of a Member State who makes a request for assistance on behalf of the competent authority; 6. ‘requested authority’ means the central liaison office, a liaison department or any competent official of a Member State who receives a request for assistance on behalf of the competent authority; 7. ‘administrative enquiry’ means all controls, checks and other action taken by Member States in the performance of their duties with a view to ensuring the proper application of tax legislation; 8. ‘exchange of information on request’ means the exchange of information based on a request made by the requesting Member State to the requested Member State in a specific case; 9. ‘automatic exchange’ means the systematic communication of predefined information to another Member State, without prior request, at pre-established regular intervals. In the context of Article 8, available information refers to information in the tax files of the Member State communicating the information, which is retrievable in accordance with the procedures for gathering and processing information in that Member State; 10. ‘spontaneous exchange’ means the non-systematic communication, at any moment and without prior request, of information to another Member State; 11. ‘person’ means: (a) a natural person; (b) a legal person; (c) where the legislation in force so provides, an association of persons recognised as having the capacity to perform legal acts but lacking the status of a legal person; or (d) any other legal arrangement of whatever nature and form, regardless of whether it has legal personality, owning or managing assets, which, including income derived therefrom, are subject to any of the taxes covered by this Directive; 12. ‘by electronic means’ means using electronic equipment for the processing, including digital compression, and storage of data, and employing wires, radio transmission, optical technologies or other electromagnetic means; 13. ‘CCN network’ means the common platform based on the common communication network (CCN), developed by the Union for all transmissions by electronic means between competent authorities in the area of customs and taxation. Article 4 Organisation 1. Each Member State shall inform the Commission, within one month from 11 March 2011, of its competent authority for the purposes of this Directive and shall inform the Commission without delay of any change thereto. The Commission shall make the information available to the other Member States and publish a list of the authorities of the Member States in the Official Journal of the European Union. 2. The competent authority shall designate a single central liaison office. The competent authority shall be responsible for informing the Commission and the other Member States thereof. The central liaison office may also be designated as responsible for contacts with the Commission. The competent authority shall be responsible for informing the Commission thereof. 3. The competent authority of each Member State may designate liaison departments with the competence assigned according to its national legislation or policy. The central liaison office shall be responsible for keeping the list of liaison departments up to date and making it available to the central liaison offices of the other Member States concerned and to the Commission. 4. The competent authority of each Member State may designate competent officials. The central liaison office shall be responsible for keeping the list of competent officials up to date and making it available to the central liaison offices of the other Member States concerned and to the Commission. 5. The officials engaged in administrative cooperation pursuant to this Directive shall in any case be deemed to be competent officials for that purpose, in accordance with arrangements laid down by the competent authorities. 6. Where a liaison department or a competent official sends or receives a request or a reply to a request for cooperation, it shall inform the central liaison office of its Member State under the procedures laid down by that Member State. 7. Where a liaison department or a competent official receives a request for cooperation requiring action which falls outside the competence it is assigned according to the national legislation or policy of its Member State, it shall forward such request without delay to the central liaison office of its Member State and inform the requesting authority thereof. In such a case, the period laid down in Article 7 shall start the day after the request for cooperation is forwarded to the central liaison office. CHAPTER II EXCHANGE OF INFORMATION SECTION I Exchange of information on request Article 5 Procedure for the exchange of information on request At the request of the requesting authority, the requested authority shall communicate to the requesting authority any information referred to in Article 1(1) that it has in its possession or that it obtains as a result of administrative enquiries. Article 6 Administrative enquiries 1. The requested authority shall arrange for the carrying out of any administrative enquiries necessary to obtain the information referred to in Article 5. 2. The request referred to in Article 5 may contain a reasoned request for a specific administrative enquiry. If the requested authority takes the view that no administrative enquiry is necessary, it shall immediately inform the requesting authority of the reasons thereof. 3. In order to obtain the requested information or to conduct the administrative enquiry requested, the requested authority shall follow the same procedures as it would when acting on its own initiative or at the request of another authority in its own Member State. 4. When specifically requested by the requesting authority, the requested authority shall communicate original documents provided that this is not contrary to the provisions in force in the Member State of the requested authority. Article 7 Time limits 1. The requested authority shall provide the information referred to in Article 5 as quickly as possible, and no later than six months from the date of receipt of the request. However, where the requested authority is already in possession of that information, the information shall be transmitted within two months of that date. 2. In certain special cases, time limits other than those provided for in paragraph 1 may be agreed upon between the requested and the requesting authorities. 3. The requested authority shall confirm immediately and in any event no later than seven working days from receipt, if possible by electronic means, receipt of a request to the requesting authority. 4. Within one month of receipt of the request, the requested authority shall notify the requesting authority of any deficiencies in the request and of the need for any additional background information. In such a case, the time limits provided for in paragraph 1 shall start the day after the requested authority has received the additional information needed. 5. Where the requested authority is unable to respond to the request by the relevant time limit, it shall inform the requesting authority immediately and in any event within three months of the receipt of the request, of the reasons for its failure to do so, and the date by which it considers it might be able to respond. 6. Where the requested authority is not in possession of the requested information and is unable to respond to the request for information or refuses to do so on the grounds provided for in Article 17, it shall inform the requesting authority of the reasons thereof immediately and in any event within one month of receipt of the request. SECTION II Mandatory automatic exchange of information Article 8 Scope and conditions of mandatory automatic exchange of information 1. The competent authority of each Member State shall, by automatic exchange, communicate to the competent authority of any other Member State, information regarding taxable periods as from 1 January 2014 that is available concerning residents in that other Member State, on the following specific categories of income and capital as they are to be understood under the national legislation of the Member State which communicates the information: (a) income from employment; (b) director’s fees; (c) life insurance products not covered by other Union legal instruments on exchange of information and other similar measures; (d) pensions; (e) ownership of and income from immovable property. 2. Before 1 January 2014, Member States shall inform the Commission of the categories listed in paragraph 1 in respect of which they have information available. They shall inform the Commission of any subsequent changes thereto. 3. The competent authority of a Member State may indicate to the competent authority of any other Member State that it does not wish to receive information on the categories of income and capital referred to in paragraph 1, or that it does not wish to receive information on income or capital not exceeding a threshold amount. It shall also inform the Commission thereof. A Member State may be considered as not wishing to receive information in accordance with paragraph 1, if it does not inform the Commission of any single category in respect of which it has information available. 4. Before 1 July 2016, Member States shall provide the Commission on an annual basis with statistics on the volume of automatic exchanges and, to the extent possible, with information on the administrative and other relevant costs and benefits relating to exchanges that have taken place and any potential changes, for both tax administrations and third parties. 5. Before 1 July 2017, the Commission shall submit a report that provides an overview and an assessment of the statistics and information received, on issues such as the administrative and other relevant costs and benefits of the automatic exchange of information, as well as practical aspects linked thereto. If appropriate, the Commission shall present a proposal to the Council regarding the categories of income and capital and/or the conditions laid down in paragraph 1, including the condition that information concerning residents in other Member States has to be available. When examining a proposal put forward by the Commission, the Council shall assess further strengthening of the efficiency and functioning of the automatic exchange of information and raising the standard thereof, with the aim of providing that: (a) the competent authority of each Member State shall, by automatic exchange, communicate to the competent authority of any other Member State, information regarding taxable periods as from 1 January 2017 concerning residents in that other Member State, on at least three of the specific categories of income and capital listed in paragraph 1, as they are to be understood under the national legislation of the Member State communicating the information; and (b) the list of categories in paragraph 1 be extended to include dividends, capital gains and royalties. 6. The communication of information shall take place at least once a year, within six months following the end of the tax year of the Member State during which the information became available. 7. The Commission shall adopt the practical arrangements for the automatic exchange of information, in accordance with the procedure referred to in Article 26(2), before the dates referred to in Article 29(1). 8. Where Member States agree on the automatic exchange of information for additional categories of income and capital in bilateral or multilateral agreements which they conclude with other Member States, they shall communicate those agreements to the Commission which shall make those agreements available to all the other Member States SECTION III Spontaneous exchange of information Article 9 Scope and conditions of spontaneous exchange of information 1. The competent authority of each Member State shall communicate the information referred to in Article 1(1) to the competent authority of any other Member State concerned, in any of the following circumstances: (a) the competent authority of one Member State has grounds for supposing that there may be a loss of tax in the other Member State; (b) a person liable to tax obtains a reduction in, or an exemption from, tax in one Member State which would give rise to an increase in tax or to liability to tax in the other Member State; (c) business dealings between a person liable to tax in one Member State and a person liable to tax in the other Member State are conducted through one or more countries in such a way that a saving in tax may result in one or the other Member State or in both; (d) the competent authority of a Member State has grounds for supposing that a saving of tax may result from artificial transfers of profits within groups of enterprises; (e) information forwarded to one Member State by the competent authority of the other Member State has enabled information to be obtained which may be relevant in assessing liability to tax in the latter Member State. 2. The competent authorities of each Member State may communicate, by spontaneous exchange, to the competent authorities of the other Member States any information of which they are aware and which may be useful to the competent authorities of the other Member States. Article 10 Time limits 1. The competent authority to which information referred to in Article 9(1) becomes available, shall forward that information to the competent authority of any other Member State concerned as quickly as possible, and no later than one month after it becomes available. 2. The competent authority to which information is communicated pursuant to Article 9 shall confirm, if possible by electronic means, the receipt of the information to the competent authority which provided the information immediately and in any event no later than seven working days. CHAPTER III OTHER FORMS OF ADMINISTRATIVE COOPERATION SECTION I Presence in administrative offices and participation in administrative enquiries Article 11 Scope and conditions 1. By agreement between the requesting authority and the requested authority and in accordance with the arrangements laid down by the latter, officials authorised by the requesting authority may, with a view to exchanging the information referred to in Article 1(1): (a) be present in the offices where the administrative authorities of the requested Member State carry out their duties; (b) be present during administrative enquiries carried out in the territory of the requested Member State. Where the requested information is contained in documentation to which the officials of the requested authority have access, the officials of the requesting authority shall be given copies thereof. 2. In so far as this is permitted under the legislation of the requested Member State, the agreement referred to in paragraph 1 may provide that, where officials of the requesting authority are present during administrative enquiries, they may interview individuals and examine records. Any refusal by the person under investigation to respect the inspection measures of the officials of the requesting authority shall be treated by the requested authority as if that refusal was committed against officials of the latter authority. 3. Officials authorised by the requesting Member State present in another Member State in accordance with paragraph 1 shall at all times be able to produce written authority stating their identity and their official capacity. SECTION II Simultaneous controls Article 12 Simultaneous controls 1. Where two or more Member States agree to conduct simultaneous controls, in their own territory, of one or more persons of common or complementary interest to them, with a view to exchanging the information thus obtained, paragraphs 2, 3 and 4 shall apply. 2. The competent authority in each Member State shall identify independently the persons for whom it intends to propose a simultaneous control. It shall notify the competent authority of the other Member States concerned of any cases for which it proposes a simultaneous control, giving reasons for its choice. It shall specify the period of time during which those controls are to be conducted. 3. The competent authority of each Member State concerned shall decide whether it wishes to take part in simultaneous controls. It shall confirm its agreement or communicate its reasoned refusal to the authority that proposed a simultaneous control. 4. The competent authority of each Member State concerned shall appoint a representative with responsibility for supervising and coordinating the control operation. SECTION III Administrative notification Article 13 Request for notification 1. At the request of the competent authority of a Member State, the competent authority of another Member State shall, in accordance with the rules governing the notification of similar instruments in the requested Member State, notify the addressee of any instruments and decisions which emanate from the administrative authorities of the requesting Member State and concern the application in its territory of legislation on taxes covered by this Directive. 2. Requests for notification shall indicate the subject of the instrument or decision to be notified and shall specify the name and address of the addressee, together with any other information which may facilitate identification of the addressee. 3. The requested authority shall inform the requesting authority immediately of its response and, in particular, of the date of notification of the instrument or decision to the addressee. 4. The requesting authority shall only make a request for notification pursuant to this Article when it is unable to notify in accordance with the rules governing the notification of the instruments concerned in the requesting Member State, or where such notification would give rise to disproportionate difficulties. The competent authority of a Member State may notify any document by registered mail or electronically directly to a person within the territory of another Member State. SECTION IV Feedback Article 14 Conditions 1. Where a competent authority provides information pursuant to Articles 5 or 9, it may request the competent authority which receives the information to send feedback thereon. If feedback is requested, the competent authority which received the information shall, without prejudice to the rules on tax secrecy and data protection applicable in its Member State, send feedback to the competent authority which provided the information as soon as possible and no later than three months after the outcome of the use of the requested information is known. The Commission shall determine the practical arrangements in accordance with the procedure referred to in Article 26(2). 2. Member States’ competent authorities shall send feedback on the automatic exchange of information to the other Member States concerned once a year, in accordance with practical arrangements agreed upon bilaterally. SECTION V Sharing of best practices and experience Article 15 Scope and conditions 1. Member States shall, together with the Commission, examine and evaluate administrative cooperation pursuant to this Directive and shall share their experience, with a view to improving such cooperation and, where appropriate, drawing up rules in the fields concerned. 2. Member States may, together with the Commission, produce guidelines on any aspect deemed necessary for sharing best practices and sharing experience. CHAPTER IV CONDITIONS GOVERNING ADMINISTRATIVE COOPERATION Article 16 Disclosure of information and documents 1. Information communicated between Member States in any form pursuant to this Directive shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under the national law of the Member State which received it. Such information may be used for the administration and enforcement of the domestic laws of the Member States concerning the taxes referred to in Article 2. Such information may also be used for the assessment and enforcement of other taxes and duties covered by Article 2 of Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures (7), or for the assessment and enforcement of compulsory social security contributions. In addition, it may be used in connection with judicial and administrative proceedings that may involve penalties, initiated as a result of infringements of tax law, without prejudice to the general rules and provisions governing the rights of defendants and witnesses in such proceedings. 2. With the permission of the competent authority of the Member State communicating information pursuant to this Directive, and only in so far as this is allowed under the legislation of the Member State of the competent authority receiving the information, information and documents received pursuant to this Directive may be used for other purposes than those referred to in paragraph 1. Such permission shall be granted if the information can be used for similar purposes in the Member State of the competent authority communicating the information. 3. Where a competent authority of a Member State considers that information which it has received from the competent authority of another Member State is likely to be useful for the purposes referred to in paragraph 1 to the competent authority of a third Member State, it may transmit that information to the latter competent authority, provided that transmission is in accordance with the rules and procedures laid down in this Directive. It shall inform the competent authority of the Member State from which the information originates about its intention to share that information with a third Member State. The Member State of origin of the information may oppose such a sharing of information within 10 working days of receipt of the communication from the Member State wishing to share the information. 4. Permission to use information pursuant to paragraph 2, which has been transmitted pursuant to paragraph 3, may be granted only by the competent authority of the Member State from which the information originates. 5. Information, reports, statements and any other documents, or certified true copies or extracts thereof, obtained by the requested authority and communicated to the requesting authority in accordance with this Directive may be invoked as evidence by the competent bodies of the requesting Member State on the same basis as similar information, reports, statements and any other documents provided by an authority of that Member State. Article 17 Limits 1. A requested authority in one Member State shall provide a requesting authority in another Member State with the information referred to in Article 5 provided that the requesting authority has exhausted the usual sources of information which it could have used in the circumstances for obtaining the information requested, without running the risk of jeopardising the achievement of its objectives. 2. This Directive shall impose no obligation upon a requested Member State to carry out enquiries or to communicate information, if it would be contrary to its legislation to conduct such inquiries or to collect the information requested for its own purposes. 3. The competent authority of a requested Member State may decline to provide information where the requesting Member State is unable, for legal reasons, to provide similar information. 4. The provision of information may be refused where it would lead to the disclosure of a commercial, industrial or professional secret or of a commercial process, or of information whose disclosure would be contrary to public policy. 5. The requested authority shall inform the requesting authority of the grounds for refusing a request for information. Article 18 Obligations 1. If information is requested by a Member State in accordance with this Directive, the requested Member State shall use its measures aimed at gathering information to obtain the requested information, even though that Member State may not need such information for its own tax purposes. That obligation is without prejudice to paragraphs 2, 3 and 4 of Article 17, the invocation of which shall in no case be construed as permitting a requested Member State to decline to supply information solely because it has no domestic interest in such information. 2. In no case shall Article 17(2) and (4) be construed as permitting a requested authority of a Member State to decline to supply information solely because this information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person. 3. Notwithstanding paragraph 2, a Member State may refuse the transmission of requested information where such information concerns taxable periods prior to 1 January 2011 and where the transmission of such information could have been refused on the basis of Article 8(1) of Directive 77/799/EEC if it had been requested before 11 March 2011. Article 19 Extension of wider cooperation provided to a third country Where a Member State provides a wider cooperation to a third country than that provided for under this Directive, that Member State may not refuse to provide such wider cooperation to any other Member State wishing to enter into such mutual wider cooperation with that Member State. Article 20 Standard forms and computerised formats 1. Requests for information and for administrative enquiries pursuant to Article 5 and their replies, acknowledgements, requests for additional background information, inability or refusal pursuant to Article 7 shall, as far as possible, be sent using a standard form adopted by the Commission in accordance with the procedure referred to in Article 26(2). The standard forms may be accompanied by reports, statements and any other documents, or certified true copies or extracts thereof. 2. The standard form referred to in paragraph 1 shall include at least the following information to be provided by the requesting authority: (a) the identity of the person under examination or investigation; (b) the tax purpose for which the information is sought. The requesting authority may, to the extent known and in line with international developments, provide the name and address of any person believed to be in possession of the requested information as well as any element that may facilitate the collection of information by the requested authority. 3. Spontaneous information and its acknowledgement pursuant to Articles 9 and 10 respectively, requests for administrative notifications pursuant to Article 13 and feedback information pursuant to Article 14 shall be sent using the standard form adopted by the Commission in accordance with the procedure referred to in Article 26(2). 4. The automatic exchange of information pursuant to Article 8 shall be sent using a standard computerised format aimed at facilitating such automatic exchange and based on the existing computerised format pursuant to Article 9 of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments (8), to be used for all types of automatic exchange of information, adopted by the Commission in accordance with the procedure referred to in Article 26(2). Article 21 Practical arrangements 1. Information communicated pursuant to this Directive shall, as far as possible, be provided by electronic means using the CCN network. Where necessary, the Commission shall adopt practical arrangements necessary for the implementation of the first subparagraph in accordance with the procedure referred to in Article 26(2). 2. The Commission shall be responsible for whatever development of the CCN network is necessary to permit the exchange of that information between Member States. Member States shall be responsible for whatever development of their systems is necessary to enable that information to be exchanged using the CCN network. Member States shall waive all claims for the reimbursement of expenses incurred in applying this Directive except, where appropriate, in respect of fees paid to experts. 3. Persons duly accredited by the Security Accreditation Authority of the Commission may have access to that information only in so far as it is necessary for the care, maintenance and development of the CCN network. 4. Requests for cooperation, including requests for notification, and attached documents may be made in any language agreed between the requested and requesting authority. Those requests shall be accompanied by a translation into the official language or one of the official languages of the Member State of the requested authority only in special cases when the requested authority states its reason for requesting a translation. Article 22 Specific obligations 1. Member States shall take all necessary measures to: (a) ensure effective internal coordination within the organisation referred to in Article 4; (b) establish direct cooperation with the authorities of the other Member States referred to in Article 4; (c) ensure the smooth operation of the administrative cooperation arrangements provided for in this Directive. 2. The Commission shall communicate to each Member State any general information concerning the implementation and application of this Directive which it receives and which it is able to provide. CHAPTER V RELATIONS WITH THE COMMISSION Article 23 Evaluation 1. Member States and the Commission shall examine and evaluate the functioning of the administrative cooperation provided for in this Directive. 2. Member States shall communicate to the Commission any relevant information necessary for the evaluation of the effectiveness of administrative cooperation in accordance with this Directive in combating tax evasion and tax avoidance. 3. Member States shall communicate to the Commission a yearly assessment of the effectiveness of the automatic exchange of information referred to in Article 8 as well as the practical results achieved. The form and the conditions of communication of that yearly assessment shall be adopted by the Commission in accordance with the procedure referred to in Article 26(2). 4. The Commission shall, in accordance with the procedure referred to in Article 26(2), determine a list of statistical data which shall be provided by the Member States for the purposes of evaluation of this Directive. 5. Information communicated to the Commission under paragraphs 2, 3 and 4 shall be kept confidential by the Commission in accordance with the provisions applicable to Union authorities. 6. Information communicated to the Commission by a Member State under paragraphs 2, 3 and 4, as well as any report or document produced by the Commission using such information, may be transmitted to other Member States. Such transmitted information shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under the national law of the Member State which received it. Reports and documents produced by the Commission referred to in this paragraph may only be used by the Member States for analytical purposes but shall not be published or made available to any other person or body without express agreement of the Commission. CHAPTER VI RELATIONS WITH THIRD COUNTRIES Article 24 Exchange of information with third countries 1. Where the competent authority of a Member State receives from a third country information that is foreseeably relevant to the administration and enforcement of the domestic laws of that Member State concerning the taxes referred to in Article 2, that authority may, in so far as this is allowed pursuant to an agreement with that third country, provide that information to the competent authorities of Member States for which that information might be useful and to any requesting authorities. 2. Competent authorities may communicate, in accordance with their domestic provisions on the communication of personal data to third countries, information obtained in accordance with this Directive to a third country, provided that all of the following conditions are met: (a) the competent authority of the Member State from which the information originates have consented to that communication; (b) the third country concerned has given an undertaking to provide the cooperation required to gather evidence of the irregular or illegal nature of transactions which appear to contravene or constitute an abuse of tax legislation. CHAPTER VII GENERAL AND FINAL PROVISIONS Article 25 Data protection All exchange of information pursuant to this Directive shall be subject to the provisions implementing Directive 95/46/EC. However, Member States shall, for the purpose of the correct application of this Directive, restrict the scope of the obligations and rights provided for in Article 10, Article 11(1), Articles 12 and 21 of Directive 95/46/EC to the extent required in order to safeguard the interests referred to in Article 13(1)(e) of that Directive. Article 26 Committee 1. The Commission shall be assisted by a committee referred to as the ‘Committee on Administrative Cooperation for Taxation’. 2. Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply. The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months. Article 27 Reporting Every five years after 1 January 2013, the Commission shall submit a report on the application of this Directive to the European Parliament and to the Council. Article 28 Repeal of Directive 77/799/EEC Directive 77/799/EEC is repealed with effect from 1 January 2013. References made to the repealed Directive shall be construed as references to this Directive. Article 29 Transposition 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive with effect from 1 January 2013. However, they shall bring into force the laws, regulations and administrative provisions necessary to comply with Article 8 of this Directive with effect from 1 January 2015. They shall forthwith inform the Commission thereof. When Member States adopt those measures, they shall contain a reference to this Directive or shall be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by the Member States. 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. Article 30 Entry into force This Directive shall enter into force on the day of its publication in the Official Journal of the European Union. Article 31 Addressees This Directive is addressed to the Member States. Done at Brussels, 15 February 2011. For the Council The President MATOLCSY Gy. (1) Opinion of 10 February 2010 (not yet published in the Official Journal). (2) Opinion of 16 July 2009 (not yet published in the Official Journal). (3) OJ L 336, 27.12.1977, p. 15. (4) OJ L 184, 17.7.1999, p. 23. (5) OJ L 281, 23.11.1995, p. 31. (6) OJ L 8, 12.1.2001, p. 1. (7) OJ L 84, 31.3.2010, p. 1. (8) OJ L 157, 26.6.2003, p. 38.

Summary: Administrative cooperation in the field of taxation Administrative cooperation in the field of taxation SUMMARY OF: Directive 2011/16/EU on cooperation between EU Member States’ tax administrations Amending Directive (EU) 2021/514 WHAT IS THE AIM OF THE DIRECTIVES? Directive 2011/16/EU (directive on administrative cooperation — DAC) establishes a system for secure administrative cooperation between the national tax authorities of the European Union (EU) Member States and lays down the rules and procedures for exchanging information for tax purposes. Amending Directive (EU) 2021/514 (commonly known as ‘DAC7’) introduces new rules to improve these cooperation procedures and includes the reporting of sales and services carried out via digital platforms. KEY POINTS The DAC applies to all taxes, apart from the following: value added tax (VAT) and customs duties; excise duties covered by other EU legislation on administrative cooperation between the Member States; compulsory social security contributions payable to a Member State, to a subdivision of a Member State or to social security institutions established under public law. This was amended in DAC7, to clarify that the information exchanged under the DAC7 directive can be used for the administration, assessment and enforcement of VAT and other indirect taxes. The relevant national authority must establish a central liaison office whose role is to: maintain contact with the European Commission and with similar bodies in other Member States, either directly or through designated departments and officials; process requests for information. Requests for information must be dealt with in the following ways. They must be confirmed, if possible electronically, within 7 working days. They must be answered as quickly as possible and within 3 months of receiving the request. If the requested authority is unable to do so in time, it must inform the applicant authority immediately and, in any event, within 3 months of the request. The period may not exceed 6 months from the date of the request. Mandatory automatic exchange of information As of 2015, national authorities must, at least once a year and where available, automatically provide relevant Member States with information on the following categories of income and capital for residents in another Member State: employment income directors’ fees life insurance schemes pensions ownership of, and income from, immovable property. Amending Directive (EU) 2021/514 adds a new category of income derived from royalties to the above list. Before 1 January 2024, the Member States must inform the Commission of at least four categories for which their competent authorities will communicate, by automatic exchange, to the competent authority of any other Member State, information about residents of that other Member State. That information shall relate to taxable periods starting on or after 1 January 2025. As of 2017, national authorities must automatically provide relevant Member States with information on financial accounts held by residents in another Member State and on advance cross-border rulings and advance pricing arrangements. Also as of 2017, under Directive 2016/881/EU, national authorities must automatically provide relevant Member States with information on country-by-country reports — reports filed by multinational groups with operations in the EU. These include information for every tax jurisdiction in which the group does business on the amount of revenue, the profit before income tax, the income tax paid and accrued, the number of employees, the stated capital, the retained earnings and the tangible assets. As of 2018, authorities must also be given access to beneficial ownership information collected pursuant to Directive (EU) 2015/849, the EU’s anti-money laundering legislation (see summary). As of 2020, national authorities must automatically provide Member States with information on reportable cross-border arrangements. Directive (EU) 2020/876 provided for an optional maximum extension of 6 months for the reporting deadlines for mandatory disclosure requirements for intermediaries and relevant taxpayers under the DAC6 — amending Directive (EU) 2018/822. New reporting obligations for digital platforms Amending Directive (EU) 2021/514 also introduces new reporting obligations on operators of EU and non-EU digital platforms that allow certain sellers to be connected to other users in order to perform the following cross-border or domestic activities: property rentals personal services sale of goods rental of any mode of transport. EU digital platforms that fulfil certain conditions in more than one Member State may elect to fulfil their reporting obligations in one such Member State. Non-EU digital platform operators that have a reporting obligation under DAC7 need to register in a Member State. Non-EU digital platform operators may be exempted from their DAC7 reporting obligations if they have to fulfil equivalent reporting obligations in a qualified non-Union jurisdiction — and that jurisdiction exchanges this equivalent information with all relevant EU Member States, in line with a specific agreement. A new Annex V contains due diligence procedures, reporting requirements and other rules for platform operators. Spontaneous information National authorities must spontaneously provide information to their counterparts elsewhere in the EU as soon as possible, and no later than 1 month after it becomes available, if: they believe there may be a tax loss in another Member State; a person in one country receives a tax reduction or exemption that would increase their tax liability in another country; business dealings between two people in different countries could lead to tax savings for either or for both; artificial profit transfers within groups of enterprises could lead to tax savings; they receive information from another authority that could be relevant in assessing their tax liability. National authorities: may agree, in two or more Member States, to carry out simultaneous controls of taxpayers in whom they share an interest; that were asked to provide information or that provided information spontaneously, may request feedback from those using it — and this should be provided within 3 months; that receive information from a non-EU country may share this with their EU counterparts if they consider it to be of use — as long as they have advised the country in question of their intention to share it (and that country has the right to refuse). All information shared between national authorities is subject to official secrecy. Every year, national authorities must provide the Commission with data on the volume of automatic exchanges of information and, where possible, must assess the related costs and benefits. Joint audits Amending Directive (EU) 2021/514 includes a new section devoted to clarifying the legal framework and principles that apply to the conduct of joint audits between two or more Member States. Member States are required to adopt and publish these rules, by 31 December 2023, and to apply them from 1 January 2024 at the latest. FROM WHEN DOES THE DIRECTIVE APPLY? Directive 2011/16/EU has applied since 11 March 2011 and had to become law in the Member States on 1 January 2013. Amending Directive (EU) 2021/514 has to become law in the Member States by 31 December 2022 and its rules apply from 1 January 2023. BACKGROUND Faced with the increasing mobility of taxpayers, more cross-border transactions and the arrival of new financial instruments, national tax administrations must increase administrative cooperation to ensure tax compliance and reduce tax evasion, tax avoidance and tax fraud. For further information, see: Administrative cooperation in (direct) taxation in the EU (European Commission) MAIN DOCUMENTS Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, pp. 1–12). Successive amendments to Directive 2011/16/EU have been incorporated into the original document. This consolidated version is of documentary value only. Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (OJ L 104, 25.3.2021, pp. 1–26). last update 06.12.2021


29.12.2011 EN Official Journal of the European Union L 345/8 COUNCIL DIRECTIVE 2011/96/EU of 30 November 2011 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (recast) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 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 Parliament (1), Having regard to the opinion of the European Economic and Social Committee (2), Acting in accordance with a special legislative procedure, Whereas: (1) 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 States (3) has been substantially amended several times (4). Since further amendments are to be made, it should be recast in the interests of clarity. (2) In the light of the judgment of the Court of Justice of 6 May 2008 in Case C-133/06 (5), it is considered necessary to redraft the wording of the second subparagraph of Article 4(3) of Directive 90/435/EEC, for the purpose of clarifying that the rules referred to therein are adopted by the Council acting in accordance with the procedure provided for in the Treaty. It is furthermore appropriate to update the Annexes to that Directive. (3) The objective of this Directive is to exempt dividends and other profit distributions paid by subsidiary companies to their parent companies from withholding taxes and to eliminate double taxation of such income at the level of the parent company. (4) The grouping together of companies of different Member States may be necessary in order to create within the Union conditions analogous to those of an internal market and in order thus to ensure the effective functioning of such an internal market. Such operations should not to be hampered by restrictions, disadvantages or distortions arising in particular from the tax provisions of the Member States. It is therefore necessary, with respect to such grouping together of companies of different Member States, to provide for tax rules which are neutral from the point of view of competition, in order to allow enterprises to adapt to the requirements of the internal market, to increase their productivity and to improve their competitive strength at the international level. (5) Such grouping together may result in the formation of groups of parent companies and subsidiaries. (6) Before the entry into force of Directive 90/435/EEC, the tax provisions governing the relations between parent companies and subsidiaries of different Member States varied appreciably from one Member State to another and were generally less advantageous than those applicable to parent companies and subsidiaries of the same Member State. Cooperation between companies of different Member States was thereby disadvantaged in comparison with cooperation between companies of the same Member State. It was necessary to eliminate that disadvantage by the introduction of a common system in order to facilitate the grouping together of companies at Union level. (7) Where a parent company by virtue of its association with its subsidiary receives distributed profits, the Member State of the parent company must either refrain from taxing such profits, or tax such profits while authorising the parent company to deduct from the amount of tax due that fraction of the corporation tax paid by the subsidiary which relates to those profits. (8) It is furthermore necessary, in order to ensure fiscal neutrality, that the profits which a subsidiary distributes to its parent company be exempt from withholding tax. (9) The payment of profit distributions to, and their receipt by, a permanent establishment of a parent company should give rise to the same treatment as that applying between a subsidiary and its parent. This should include the situation where a parent company and its subsidiary are in the same Member State and the permanent establishment is in another Member State. On the other hand, it appears that situations where the permanent establishment and the subsidiary are situated in the same Member State can, without prejudice to the application of the Treaty principles, be dealt with on the basis of national legislation by the Member State concerned. (10) In relation to the treatment of permanent establishments Member States may need to determine the conditions and legal instruments in order to protect the national tax revenue and fend off circumvention of national laws, in accordance with the Treaty principles and taking into account internationally accepted tax rules. (11) When corporate groups are organised in chains of companies and profits are distributed through the chain of subsidiaries to the parent company, double taxation should be eliminated either by exemption or tax credit. In the case of tax credit the parent company should be able to deduct any tax paid by any of the subsidiaries in the chain provided that the requirements set out in this Directive are met. (12) This Directive should be without prejudice to the obligations of the Member States relating to the time limits for transposition into national law of the Directives set out in Part B of Annex II, HAS ADOPTED THIS DIRECTIVE: Article 1 1. Each Member State shall apply this Directive: (a) to distributions of profits received by companies of that Member State which come from their subsidiaries of other Member States; (b) to distributions of profits by companies of that Member State to companies of other Member States of which they are subsidiaries; (c) to distributions of profits received by permanent establishments situated in that Member State of companies of other Member States which come from their subsidiaries of a Member State other than that where the permanent establishment is situated; (d) to distributions of profits by companies of that Member State to permanent establishments situated in another Member State of companies of the same Member State of which they are subsidiaries. 2. This Directive shall not preclude the application of domestic or agreement-based provisions required for the prevention of fraud or abuse. Article 2 For the purposes of this Directive the following definitions shall apply: (a) ‘company of a Member State’ means any company which: (i) takes one of the forms listed in Annex I, Part A; (ii) according to the tax laws of a Member State is considered to be resident in that Member State for tax purposes and, under the terms of a double taxation agreement concluded with a third State, is not considered to be resident for tax purposes outside the Union; (iii) moreover, is subject to one of the taxes listed in Annex I, Part B, without the possibility of an option or of being exempt, or to any other tax which may be substituted for any of those taxes; (b) ‘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 in so far as the profits of that place of business are subject to tax in the Member State in which it is situated by virtue of the relevant bilateral tax treaty or, in the absence of such a treaty, by virtue of national law. Article 3 1. For the purposes of applying this Directive: (a) the status of parent company shall be attributed: (i) at least to a company of a Member State which fulfils the conditions set out in Article 2 and has a minimum holding of 10 % in the capital of a company of another Member State fulfilling the same conditions; (ii) under the same conditions, to a company of a Member State which has a minimum holding of 10 % in the capital of a company of the same Member State, held in whole or in part by a permanent establishment of the former company situated in another Member State; (b) ‘subsidiary’ means that company the capital of which includes the holding referred to in point (a). 2. By way of derogation from paragraph 1, Member States shall have the option of: (a) replacing, by means of bilateral agreement, the criterion of a holding in the capital by that of a holding of voting rights; (b) not applying this Directive to companies of that Member State, which do not maintain for an uninterrupted period of at least 2 years holdings qualifying them as parent companies, or to those of their companies in which a company of another Member State does not maintain such a holding for an uninterrupted period of at least 2 years. Article 4 1. Where a parent company or its permanent establishment, by virtue of the association of the parent company with its subsidiary, receives distributed profits, the Member State of the parent company and the Member State of its permanent establishment shall, except when the subsidiary is liquidated, either: (a) refrain from taxing such profits; or (b) tax such profits while authorising the parent company and the permanent establishment to deduct from the amount of tax due that fraction of the corporation tax related to those profits and paid by the subsidiary and any lower-tier subsidiary, subject to the condition that at each tier a company and its lower-tier subsidiary fall within the definitions laid down in Article 2 and meet the requirements provided for in Article 3, up to the limit of the amount of the corresponding tax due. 2. Nothing in this Directive shall prevent the Member State of the parent company from considering a subsidiary to be fiscally transparent on the basis of that Member State’s assessment of the legal characteristics of that subsidiary arising from the law under which it is constituted and therefore from taxing the parent company on its share of the profits of its subsidiary as and when those profits arise. In this case the Member State of the parent company shall refrain from taxing the distributed profits of the subsidiary. When assessing the parent company’s share of the profits of its subsidiary as they arise the Member State of the parent company shall either exempt those profits or authorise the parent company to deduct from the amount of tax due that fraction of the corporation tax related to the parent company’s share of profits and paid by its subsidiary and any lower-tier subsidiary, subject to the condition that at each tier a company and its lower-tier subsidiary fall within the definitions laid down in Article 2 and meet the requirements provided for in Article 3, up to the limit of the amount of the corresponding tax due. 3. Each Member State shall retain the option of providing that any charges relating to the holding and any losses resulting from the distribution of the profits of the subsidiary may not be deducted from the taxable profits of the parent company. Where the management costs relating to the holding in such a case are fixed as a flat rate, the fixed amount may not exceed 5 % of the profits distributed by the subsidiary. 4. Paragraphs 1 and 2 shall apply until the date of effective entry into force of a common system of company taxation. 5. The Council, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, shall, at the appropriate time, adopt the rules to apply as from the date of effective entry into force of a common system of company taxation. Article 5 Profits which a subsidiary distributes to its parent company shall be exempt from withholding tax. Article 6 The Member State of a parent company may not charge withholding tax on the profits which such a company receives from a subsidiary. Article 7 1. The term ‘withholding tax’ as used in this Directive shall not cover an advance payment or prepayment (précompte) of corporation tax to the Member State of the subsidiary which is made in connection with a distribution of profits to its parent company. 2. This Directive shall not affect the application of domestic or agreement-based provisions designed to eliminate or lessen economic double taxation of dividends, in particular provisions relating to the payment of tax credits to the recipients of dividends. Article 8 1. Member States shall bring into force the laws, regulations, and administrative provisions necessary to comply with this Directive as from 18 January 2012. They shall forthwith inform the Commission thereof. When Member States adopt these measures, 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 reference shall be laid down by Member States. 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 correlation table between them and this Directive. Article 9 Directive 90/435/EEC, as amended by the acts listed in Annex II, Part A, is repealed, without prejudice to the obligations of the Member States relating to the time limits for transposition into national law 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. Article 10 This Directive shall enter into force on the 20th day following its publication in the Official Journal of the European Union. Article 11 This Directive is addressed to the Member States. Done at Brussels, 30 November 2011. For the Council The President J. VINCENT-ROSTOWSKI (1) Opinion delivered on 4 May 2011 (not yet published in the Official Journal). (2) OJ C 107, 6.4.2011, p. 73. (3) OJ L 225, 20.8.1990, p. 6. (4) See Annex II, Part A. (5) [2008] ECR I-03189. ANNEX I PART A List of companies referred to in Article 2(a)(i) (a) companies incorporated under Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European company (SE) (1) and Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees (2) and cooperative societies incorporated under Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE) (3) and Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees (4); (b) companies under Belgian law known as ‘société anonyme’/‘naamloze vennootschap’, ‘société en commandite par actions’/‘commanditaire vennootschap op aandelen’, ‘société privée à responsabilité limitée’/‘besloten vennootschap met beperkte aansprakelijkheid’, ‘société coopérative à responsabilité limitée’/‘coöperatieve vennootschap met beperkte aansprakelijkheid’, ‘société coopérative à responsabilité illimitée’/‘coöperatieve vennootschap met onbeperkte aansprakelijkheid’, ‘société en nom collectif’/‘vennootschap onder firma’, ‘société en commandite simple’/‘gewone commanditaire vennootschap’, public undertakings which have adopted one of the abovementioned legal forms, and other companies constituted under Belgian law subject to Belgian corporate tax; (c) companies under Bulgarian law known as: ‘събирателно дружество’, ‘командитно дружество’, ‘дружество с ограничена отговорност’, ‘акционерно дружество’, ‘командитно дружество с акции’, ‘неперсонифицирано дружество’, ‘кооперации’, ‘кооперативни съюзи’, ‘държавни предприятия’ constituted under Bulgarian law and carrying on commercial activities; (d) companies under Czech law known as: ‘akciová společnost’, ‘společnost s ručením omezeným’; (e) companies under Danish law known as ‘aktieselskab’ and ‘anpartsselskab’. Other companies subject to tax under the Corporation Tax Act, in so far as their taxable income is calculated and taxed in accordance with the general tax legislation rules applicable to ‘aktieselskaber’; (f) companies under German law known as ‘Aktiengesellschaft’, ‘Kommanditgesellschaft auf Aktien’, ‘Gesellschaft mit beschränkter Haftung’, ‘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; (g) companies under Estonian law known as: ‘täisühing’, ‘usaldusühing’, ‘osaühing’, ‘aktsiaselts’, ‘tulundusühistu’; (h) companies incorporated or existing under Irish law, bodies registered under the Industrial and Provident Societies Act, building societies incorporated under the Building Societies Acts and trustee savings banks within the meaning of the Trustee Savings Banks Act, 1989; (i) companies under Greek law known as ‘ανώνυμη εταιρεία’,·‘εταιρεία περιορισμένης ευθύνης (Ε.Π.Ε.)’·and other companies constituted under Greek law subject to Greek corporate tax; (j) companies under Spanish law known as: ‘sociedad anónima’, ‘sociedad comanditaria por acciones’, ‘sociedad de responsabilidad limitada’, public law bodies which operate under private law. Other entities constituted under Spanish law subject to Spanish corporate tax (‘Impuesto sobre Sociedades’); (k) companies under French law known as ‘société anonyme’, ‘société en commandite par actions’, ‘société à responsabilité limitée’, ‘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, and other companies constituted under French law subject to French corporate tax; (l) companies under Italian law known as ‘società per azioni’, ‘società in accomandita per azioni’, ‘società a responsabilità limitata’, ‘società cooperative’, ‘società di mutua assicurazione’, and private and public entities whose activity is wholly or principally commercial; (m) under Cypriot law: ‘εταιρείες’ as defined in the Income Tax laws; (n) companies under Latvian law known as: ‘akciju sabiedrība’, ‘sabiedrība ar ierobežotu atbildību’; (o) companies incorporated under the law of Lithuania; (p) companies under Luxembourgish law known as ‘société anonyme’, ‘société en commandite par actions’, ‘société à responsabilité limitée’, ‘société 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; (q) companies under Hungarian law known as: ‘közkereseti társaság’, ‘betéti társaság’, ‘közös vállalat’, ‘korlátolt felelősségű társaság’, ‘részvénytársaság’, ‘egyesülés’, ‘szövetkezet’; (r) companies under Maltese law known as: ‘Kumpaniji ta’ Responsabilita’ Limitata’, ‘Soċjetajiet en commandite li l-kapital tagħhom maqsum f’azzjonijiet’; (s) companies under Dutch law known as ‘naamloze vennootschap’, ‘besloten vennootschap met beperkte aansprakelijkheid’, ‘open 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; (t) companies under Austrian law known as ‘Aktiengesellschaft’, ‘Gesellschaft mit beschränkter Haftung’, ‘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; (u) companies under Polish law known as: ‘spółka akcyjna’, ‘spółka z ograniczoną odpowiedzialnością’; (v) commercial companies or civil law companies having a commercial form and cooperatives and public undertakings incorporated in accordance with Portuguese law; (w) companies under Romanian law known as: ‘societăți pe acțiuni’, ‘societăți în comandită pe acțiuni’, ‘societăți cu răspundere limitată’; (x) companies under Slovenian law known as: ‘delniška družba’, ‘komanditna družba’, ‘družba z omejeno odgovornostjo’; (y) companies under Slovak law known as: ‘akciová spoločnosť’, ‘spoločnosť s ručením obmedzeným’, ‘komanditná spoločnosť’; (z) companies under Finnish law known as ‘osakeyhtiö’/‘aktiebolag’, ‘osuuskunta’/‘andelslag’, ‘säästöpankki’/‘sparbank’ and ‘vakuutusyhtiö’/‘försäkringsbolag’; (aa) companies under Swedish law known as ‘aktiebolag’, ‘försäkringsaktiebolag’, ‘ekonomiska föreningar’, ‘sparbanker’, ‘ömsesidiga försäkringsbolag’, ‘försäkringsföreningar’; (ab) companies incorporated under the law of the United Kingdom. PART B List of taxes referred to in Article 2(a)(iii) — impôt des sociétés/vennootschapsbelasting in Belgium, — корпоративен данък in Bulgaria, — daň z příjmů právnických osob in the Czech Republic, — selskabsskat in Denmark, — Körperschaftssteuer in Germany, — tulumaks in Estonia, — corporation tax in Ireland, — φόρος εισοδήματος νομικών προσώπων κερδοσκοπικού χαρακτήρα in Greece, — impuesto sobre sociedades in Spain, — impôt sur les sociétés in France, — imposta sul reddito delle società in Italy, — φόρος εισοδήματος in Cyprus, — uzņēmumu ienākuma nodoklis in Latvia, — pelno mokestis in Lithuania, — impôt sur le revenu des collectivités in Luxembourg, — társasági adó, osztalékadó in Hungary, — taxxa fuq l-income in Malta, — vennootschapsbelasting in the Netherlands, — Körperschaftssteuer in Austria, — podatek dochodowy od osób prawnych in Poland, — imposto sobre o rendimento das pessoas colectivas in Portugal, — impozit pe profit in Romania, — davek od dobička pravnih oseb in Slovenia, — daň z príjmov právnických osôb in Slovakia, — yhteisöjen tulovero/inkomstskatten för samfund in Finland, — statlig inkomstskatt in Sweden, — corporation tax in the United Kingdom. (1) OJ L 294, 10.11.2001, p. 1. (2) OJ L 294, 10.11.2001, p. 22. (3) OJ L 207, 18.8.2003, p. 1. (4) OJ L 207, 18.8.2003, p. 25. ANNEX II PART A Repealed Directive with list of its successive amendments (referred to in Article 9) Council Directive 90/435/EEC (OJ L 225, 20.8.1990, p. 6). Point XI.B.I.3 of Annex I to the 1994 Act of Accession (OJ C 241, 29.8.1994, p. 196). Council Directive 2003/123/EC (OJ L 7, 13.1.2004, p. 41). Point 9.8 of Annex II to the 2003 Act of Accession (OJ L 236, 23.9.2003, p. 555). Council Directive 2006/98/EC (OJ L 363, 20.12.2006, p. 129). Annex, point 7 only PART B List of time limits for transposition into national law (referred to in Article 9) Directive Time limit for transposition 90/435/EEC 31 December 1991 2003/123/EC 1 January 2005 2006/98/EC 1 January 2007 ANNEX III Correlation Table Directive 90/435/EEC This Directive Article 1(1) first to fourth indents Article 1(1)(a) to (d) Article 1(2) Article 1(2) Article 2(1) first part of the introductory phrase Article 2 introductory phrase Article 2(1) second part of the introductory phrase Article 2(a), introductory phrase Article 2(1)(a) Article 2(a)(i) Article 2(1)(b) Article 2(a)(ii) Article 2(1)(c) introductory phrase of the first subparagraph and second subparagraph Article 2(a)(iii) Article 2(1)(c), first subparagraph, first to twenty-seventh indents Annex I, Part B, first to twenty-seventh indents Article 2(2) Article 2(b) Article 3(1) introductory phrase Article 3(1), introductory phrase Article 3(1)(a) first subparagraph, initial words Article 3(1)(a), introductory phrase Article 3(1)(a) first subparagraph, final words Article 3(1)(a)(i) Article 3(1)(a) second subparagraph Article 3(1)(a)(ii) Article 3(1)(a) third subparagraph — Article 3(1)(a) fourth subparagraph — Article 3(1)(b) Article 3(1)(b) Article 3(2) first and second indents Article 3(2)(a) and (b) Article 4(1) first and second indents Article 4(1)(a) and (b) Article 4(1a) Article 4(2) Article 4(2) first sentence Article 4(3) first subparagraph Article 4(2) second sentence Article 4(3) second subparagraph Article 4(3) first subparagraph Article 4(4) Article 4(3) second subparagraph Article 4(5) Articles 5, 6 and 7 Articles 5, 6 and 7 Article 8(1) — Article 8(2) Article 8 — Article 9 — Article 10 Article 9 Article 11 Annex Annex I, Part A — Annex II — Annex III

Summary: Common system of taxation applicable in the case of parent companies and subsidiaries of different European Union Member States Common system of taxation applicable in the case of parent companies and subsidiaries of different European Union Member States SUMMARY OF: Directive 2011/96/EU on taxation applicable in the case of parent companies and subsidiaries of different Member States WHAT IS THE AIM OF THE DIRECTIVE? Commonly referred to as the parent-subsidiary directive, it aims to exempt dividends and other profit distributions paid by subsidiary companies to their parent company from withholding taxes, and to eliminate the double taxation of such income at the level of the parent company. This common system is designed to facilitate the grouping together of companies across the European Union (EU), with a view to ensuring that its internal market functions effectively. KEY POINTS Types of companies affected The types of companies affected are public limited companies, private limited companies, certain cooperatives, mutual companies, savings banks, funds, European companies and European cooperative societies. These companies must not have their tax domicile outside the EU and must be subject to corporation tax without the possibility of an option and without being exempt. The status of parent company is attributed to a company from an EU Member State that has a minimum holding of 10% in the capital of a company from another Member State. Receiving profits A parent company or a permanent establishment has the possibility of receiving profits, even outside of the liquidation period. In this case, the Member State of the parent company or of the permanent establishment must refrain from taxing these profits or must tax them while authorising the parent company and the permanent establishment to deduct from the amount of tax due that fraction of the corporation tax related to those profits and paid by the subsidiary and any lower-tier subsidiary. In an effort to prevent cross-border companies from scheduling their payments within the group in order to benefit from double non-taxation, the Member State of the parent company or of the permanent establishment must tax the profits received, insofar as these profits are deductible by the subsidiary. Member States retain the option of providing that any charges, relating to the holding, and any losses in capital, resulting from the distribution of the profits of the subsidiary, may not be deducted from the taxable profits of the parent company. The profits distributed by a subsidiary to its parent company are exempt from withholding tax. Similarly, the Member State of the parent company may not charge withholding tax on the profits that this company receives from its subsidiary. However, this rule does not concern the advance payment or the prepayment of corporation tax to the Member State in which the subsidiary is located, made in connection with a distribution of profits to the parent company. Anti-abuse rule Amending Directive (EU) 2015/121 incorporates anti-abuse rules within Directive 2011/95/EU to prevent the latter’s misuse in terms of tax evasion, tax fraud or abusive practices. These are designed to serve the specific purpose of tackling an arrangement or a series of arrangements which are not genuine, that is, which do not reflect economic reality. FROM WHEN DOES THE DIRECTIVE APPLY? Directive 2011/96/EU has applied since 18 January 2012 and had to become law in the Member States by that date. Amending Directive (EU) 2015/121 has applied since 17 February 2015 and had to become law in the Member States by 31 December 2015. BACKGROUND For further information, see: Parent companies and their subsidiaries in the European Union (European Commission). MAIN DOCUMENT Directive 2011/96/EU of the Council of 30 November 2011 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (recast) (OJ L 345, 29.12.2011, pp. 8–16). Successive amendments to Directive 2011/96/EU have been incorporated in the original text. This consolidated version is of documentary value only. last update 23.02.2022