34 Amendments of Paul TANG related to 2016/0336(CNS)
Amendment 38 #
Proposal for a directive
Recital 1
Recital 1
(1) Companies which seek to do business across frontiers within the Union encounter serious obstacles and market distortions owing to the existence and interaction of 28 disparate corporate tax systems. Furthermore, tax planning structures have become ever-more sophisticated over time, as they develop across various jurisdictions and effectively take advantage of the technicalities of a tax system or of mismatches between two or more tax systems for the purpose of reducing the tax liability of companies. Digitisation greatly facilitates cross border business. Removing barriers to the Single Market, including tax barriers, and creating a more favourable business environment through neutral, simplified and coordinated tax rules is therefore more important than ever. Current rules may need to be adapted to respond to the digitalisation of our economy. Although those situations highlight shortcomings that are completely different in nature, they both create obstacles which impede the proper functioning of the internal market. Action to rectify these problems should therefore address both these types of market deficiencies.
Amendment 58 #
Proposal for a directive
Recital 3
Recital 3
(3) As pointed out in the proposal of 16 March 2011 for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB)7 , a corporate tax system which treats the Union as a single market for the purpose of computing the corporate tax base of companies would facilitate cross-border activity for companies resident in the Union and promote the objective of making it a more competitive location for investment internationally. The proposal of 2011 for a CCCTB focussed on the objective of facilitating the expansion of commercial activity for businesses within the Union. In addition to that objective, it should also be taken into account that a CCCTB can be highly effective in improving the functioning of the internal market through countering tax avoidance schemes. In this light, the initiative for a CCCTB should be re- launched in order to address, on an equal footing, both the aspect of business facilitation and the initiative's function in countering tax avoidance. Once implemented in all Member States, the CCCTB would ensure that taxes are paid where profits arise. Such an approach would best serve the aim of eradicating distortions in the functioning of the internal market. __________________ 7 Proposal for a Council Directive COM (2011) 121 final/2 of 3.10.2011 on a Common Consolidated Corporate Tax Base.
Amendment 60 #
Proposal for a directive
Recital 3 a (new)
Recital 3 a (new)
(3a) The European Commission, in its communication to the European Parliament and the Council of 21 September 2017 entitled "A fair and efficient tax system in the European Union for the Digital Single Market", believes that the CCCTB offers the basis to address the tax challenges posed by the digital economy.
Amendment 69 #
Proposal for a directive
Recital 4
Recital 4
(4) Considering the need to act swiftly in order to ensure a proper functioning of the internal market by making it, on the one hand, friendlier to trade and investment and, on the other hand, more resilient to tax avoidance schemes, it is necessary to divide the ambitious CCCTB initiative into two separate proposals. At a first stage, rules on a common corporate tax base should be agreed, before addressing, at a second stage, the issue of consolidation. But implementing the CCTB without consolidation would not tackle the problem of profit shifting. Therefore, it is essential that the consolidation is applied in all Member States from 31 December 2019.
Amendment 80 #
Proposal for a directive
Recital 5
Recital 5
Amendment 89 #
Proposal for a directive
Recital 5 a (new)
Recital 5 a (new)
(5a) Taking into account the digital change in the business environment, it is necessary to define the concept of a digital business establishment. Companies which raise revenues in a Member State without having a physical establishment in that Member State have to be treated in the same way as companies with a physical establishment.
Amendment 114 #
Proposal for a directive
Recital 11 a (new)
Recital 11 a (new)
(11a) To end the race to the bottom on corporate tax rates at EU level, a European minimum effective corporate tax rate is required. On average, corporate tax in the European Union decreased from 35% in the 1990s to 22.5% today. By adopting the CCCTB, Member States will no longer be able to compete through tax bases, the result being further decreases in the corporate tax rates.
Amendment 117 #
Proposal for a directive
Recital 13 a (new)
Recital 13 a (new)
(13a) The Commission should create a new department in DG TAXUD to monitor Member States’ tax revenues after the implementation of the CCCTB. In this view, the Commission should increase the means of this DG. This new department should be mandated to give guidance to companies and Member States’ tax administrations.
Amendment 119 #
Proposal for a directive
Recital 13 b (new)
Recital 13 b (new)
(13b) As the High Level Group on Own Resources suggests, a part of the fiscal revenues gained from the common consolidated tax base can be used as an own resource for the Union budget, in order to proportionally reduce Member States’ contributions to the same budget. This should lead to a more effective way to levy taxes on exporting and multinational corporations, who benefit most from globalisation and the Single Market, and thus introduce a user-pays principle.
Amendment 121 #
Proposal for a directive
Recital 14 a (new)
Recital 14 a (new)
(14a) In order to create a level playing field and to eliminate tax competition conditions having a negative impact on the economic performance of the internal market and leading to a race to the bottom, minimum effective corporate tax rates should be introduced so as to optimise tax efficiency. Such a minimum effective tax rate would furthermore lead to the benefit of better comparing economic performance of Member States across the EU. The average EU top statutory corporate income tax rate is 22.5%, and in some Member States as low as 10%. The declining tendency of this rate should be reversed so as to avoid a race to the bottom. This directive therefore asks the Commission to come up with a legislative proposal for a minimum effective corporate tax rate at 18% in each Member State. Until such a legislation is in place, the Commission should publish statistics of the effective tax rates in Member States, distinguishing between the effective tax rates of SMEs and MNEs.
Amendment 125 #
Proposal for a directive
Recital 16
Recital 16
(16) In order to supplement or amend certain non-essential elements of this Directive, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission with respect of (i) taking into account changes to the laws of Member States concerning the company forms and corporate taxes and amend Annexes I and II accordingly; (ii) laying down additional definitions; and (iii) supplementing the rule on the limitation of interest deductibility with anti-fragmentation rules, to better address the tax avoidance risks which may emerge within a group. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level and the opinion of the European Parliament. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and the Council.
Amendment 141 #
Proposal for a directive
Article 2 – paragraph 1 – introductory part
Article 2 – paragraph 1 – introductory part
1. The rules of this Directive shall apply to a company that is established under the laws of a Member State, including its permanent establishments and digital business in other Member States, where the company meets all of the following conditions:
Amendment 144 #
Proposal for a directive
Article 2 – paragraph 1 – point c
Article 2 – paragraph 1 – point c
(c) it belongs to a consolidated group for financial accounting purposes with a total consolidated group revenue that exceeded EUR 750 000 000 during the finacorresponding to the amount laid down point (c) of Article 2(1) of Council Directive ... on a Common Corporate Tax Base1a+; _____________ 1aCouncial year preceding the relevant financial year; Directive ... on a Common Corporate Tax Base (OJ L ..., ....., p. ...). + OJ: Please insert the serial number of the document 2016/0337(CNS) into the title and complete footnote 1 with regard to the same document.
Amendment 149 #
Proposal for a directive
Article 2 – paragraph 2 – subparagraph 1
Article 2 – paragraph 2 – subparagraph 1
This Directive shall also apply to a company that is established under the laws of a third country in respect of its permanent establishments situated in one or more Member States, and in relation to revenues otherwise accrued in a Member State, where the company meets the conditions laid down in points (b) to (d) of paragraph 1.
Amendment 156 #
Proposal for a directive
Article 3 – paragraph 1 – point 23
Article 3 – paragraph 1 – point 23
(23) 'consolidated tax base' means the result of adding up the tax basesconsolidated net taxable revenue of allthe group members, as calculated on a consistent accounting basis applicable to all group members in accordance with Directive 2016/xx/EU;
Amendment 159 #
Proposal for a directive
Article 3 – paragraph 1 – point 28 a (new)
Article 3 – paragraph 1 – point 28 a (new)
(28a) 'royalty cost' means costs arising from payments of any kind made as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films and software, any patent, trademark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience, or any other intangible asset; payments for the use of, or the right to use, industrial, commercial or scientific equipment shall be regarded as royalty costs;
Amendment 161 #
Proposal for a directive
Article 3 – paragraph 1 – point 28 b (new)
Article 3 – paragraph 1 – point 28 b (new)
(28b) 'transfer prices' means the prices at which an undertaking transfers tangible goods or intangible assets or provides services to associated undertakings;
Amendment 162 #
Proposal for a directive
Article 3 – paragraph 1 – point 28 c (new)
Article 3 – paragraph 1 – point 28 c (new)
(28c) 'patent box' means a system used to calculate the income deriving from intellectual property (IP) which is eligible for tax benefits by establishing a link between the eligible expenditure effected when the IP assets were created (expressed as a proportion of the overall expenditure linked to the creation of the IP assets) and the income deriving from those IP assets; this system restricts the IP assets to patents or intangible goods with an equivalent function and provides the basis for the definition of 'eligible expenditure', 'overall expenditure' and 'income deriving from IP assets';
Amendment 163 #
Proposal for a directive
Article 3 – paragraph 1 – point 28 d (new)
Article 3 – paragraph 1 – point 28 d (new)
(28d) ‘Digital business establishment’ means an establishment which is specifically directed towards consumers or businesses in a Member State regard shall be had to the fact that the business establishment is conducting its business under the top level domain of the Member State or of the EU, or in relation to mobile application based business, distributing its application via the Member State specific part of a mobile application distribution centre;
Amendment 164 #
Proposal for a directive
Article 3 – paragraph 1 – point 28 e (new)
Article 3 – paragraph 1 – point 28 e (new)
(28e) An effective corporate tax rate means corporate tax paid in relation to earnings and profits in financial statements of the corporation.
Amendment 183 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. The tax bases of all members of a group shall be added together into a consolidated tax basenet taxable revenue of members of a group shall be based on their financial statements that shall be adjusted so that taxable revenues shall be all cash, exchange or barter receipts arising during or due for the period less those accounted for in previous periods, those of a capital nature and those explicitly exempted from charge; less those cash, barter or exchange payments made or due for the period that were incurred for the purposes of the trade of the corporation less those accounted for in previous periods, those that represent loan or equity capital repayment and those that are explicitly exempted from deduction; less those allowances and reliefs specifically permitted and those excesses of deductions over revenues brought forward from previous periods.
Amendment 191 #
Proposal for a directive
Article 9 – paragraph 2
Article 9 – paragraph 2
2. Groups shall apply a consistent and adequately documented method for recording intra-group transactions. Groups may change the method only for valid commercial reasons and only at the beginning of a tax yearAll such transactions shall be eliminated from the tax base as a result of the consolidation required by Article 7 (1).
Amendment 194 #
Proposal for a directive
Article 9 – paragraph 3
Article 9 – paragraph 3
Amendment 196 #
Proposal for a directive
Article 9 – paragraph 4
Article 9 – paragraph 4
Amendment 237 #
Proposal for a directive
Article 38 – paragraph 1
Article 38 – paragraph 1
1. Sales of goods shall be included in the sales factor of the group member located in the Member State where the dispatch or transport of the goods to the person acquiring them ends. Where that place cannot be determined or the group member has no taxable nexus, the sales of goods shall be attributed to the group member located in the Member State of the last identifiable location of the goods.
Amendment 246 #
Proposal for a directive
Article 44 – paragraph -1 (new)
Article 44 – paragraph -1 (new)
-1. No deductions shall be allowed to the extent that they would lead to an effective corporate tax rate lower than 18% on revenues, excluding exempt revenues.
Amendment 247 #
Proposal for a directive
Article 45 – paragraph 1
Article 45 – paragraph 1
The tax liability of each group member shall be the outcome of the application of the national tax rate to the apportioned share, adjusted in accordance with Article 44, and further reduced with the deductions provided for in Article 25. A minimum effective corporate tax rate shall be set at 18%.
Amendment 248 #
Proposal for a directive
Article 45 – paragraph 1 a (new)
Article 45 – paragraph 1 a (new)
The Commission shall put forward by 1 January 2019 a legislative proposal for a minimum effective corporate tax rate at 18% in each Member State, for the purpose of maximisation of tax efficiency, so as to make it possible to compare rates across the Union and which feeds into the Union own resources. This rate shall be applied after a phasing-in of five years in line with the convergence code.
Amendment 249 #
Proposal for a directive
Article 45 a (new)
Article 45 a (new)
Article 45a Tax revenues generated from the common consolidated corporate tax base The Commission shall by 31st of December 2019 at the latest propose a regulation on making the CCCTB-based own resource available to the EU budget. Through this regulation a common rate shall be introduced. This shall be a rate of 5% of the common consolidated corporate tax base, which shall flow into the European budget as a new genuine own resource, in order to proportionally reduce Member State contributions to the same budget.
Amendment 278 #
Proposal for a directive
Article 73 – paragraph 1
Article 73 – paragraph 1
For the purposes of this Directive, the scope of controlled foreign company legislation under Article 59 of Directive 2016/xx/EU shall be limited to relations between group members and entities that are resident for tax purposes, or permanent establishments or digital business establishments that are situated, in a third country.
Amendment 283 #
Proposal for a directive
Article 76 – paragraph 1
Article 76 – paragraph 1
The European Parliament shall assess and be informed of the adoption of delegated acts by the Commission, of any objection formulated to them, and of the revocation of that delegation of powers by the Council.
Amendment 286 #
Proposal for a directive
Article 79 – paragraph 1
Article 79 – paragraph 1
The Commission shall, five years after the entry into force of this Directive, review its application and report to the Council on the operation of this Directive. The report shall in particular include an analysis of the impact of the mechanism set up in Chapter VIII of this Directive on the apportionment of the tax bases between the Member States. In drawing the conclusions of such a review, the Commission shall propose the terms and conditions to allocate a part of the tax revenues generated from the common consolidated corporate tax base to the budget of the European Union in order to proportionally reduce Member States contributions to the same budget.
Amendment 292 #
Proposal for a directive
Article 80 – paragraph 1 – subparagraph 1
Article 80 – paragraph 1 – subparagraph 1
Member States shall adopt and publish, by 31st December 202019 at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.
Amendment 299 #
Proposal for a directive
Article 80 – paragraph 1 – subparagraph 2
Article 80 – paragraph 1 – subparagraph 2
They shall apply those provisions from 1st January 20210.