35 Amendments of Isabel BENJUMEA BENJUMEA related to 2023/0320(CNS)
Amendment 35 #
Proposal for a directive
Recital 1
Recital 1
(1) In the Union, there is currently no common approach to the computation of the taxable base for businesses that operate in two or more Member States. EU businesses are therefore obliged to comply with the rules of different corporate tax systems, depending on the Member State in which they operate.
Amendment 36 #
Proposal for a directive
Recital 2
Recital 2
(2) The co-existence and interaction of 27 different corporate income tax systems in the Union gives rise to complexity in tax compliance and leads to an uneven level playing field for businesses that discourages cross-border investments, hampering the development of our single market compared to our main competitors. This state of play has a higher impact on SMEs than on larger taxpayeand small investors and has become more evident as globalisation and digitalisation of the economy have significantly altered the perception of borders and business models, particularly the further development of our single market, which requires us to take measures to further that development. The attempts by governmentstates to adapt to this new reality have sometimes resulted in a fragmented response among Member States, leading to further distortions in the internal market. Furthermore, the various legal frameworks inevitably lead to different tax administration practices across Member States. This often entails lengthy procedures characterised by unpredictability and inconsistency along with high compliance costs which largely affect SMEs, discouraging them from investing in more than one Member State. Mutual trust and good faith among states are required in order to achieve cooperation on tax decisions and complete, improve and further develop our single market.
Amendment 39 #
Proposal for a directive
Recital 2 a (new)
Recital 2 a (new)
(2 a) The 24 million SMEs established in the EU represent two thirds of private sector jobs and 99% of all businesses in the Union, being the backbone of European economy. It is therefore essential to support micro, small and medium enterprises in order to promote job creation, to enhance growth, to stand for a fair and transparent competition, to support competitiveness and to attract investment. To that end, the EU must tackle dimensions such as payment delays, access to finance, skills, digital transition, innovation, internationalisation or access to data. However, regulatory obstacles or administrative burden continues to be the key challenge for European SMEs. This Directive must be interpreted according to the principle of SME relief and support.
Amendment 40 #
Proposal for a directive
Recital 2 b (new)
Recital 2 b (new)
(2 b) SMEs spend approximately 2,5% of their turnover on compliance costs related to tax obligations. The situation of very small enterprises is particularly serious, as they represent 90% of the estimated yearly EUR 54 billion costs of EU businesses compliance costs related to their corporate income taxes. This scenario proves the need for the adoption of this Directive in order to significantly reduce tax compliance costs and free financial resources to allow SMEs to invest on their business.
Amendment 41 #
Proposal for a directive
Recital 3
Recital 3
(3) The variety of ways for doing business in the internal market requires different solutions for different businesses when it comes to tackling the current challenges posed by their cross-border operations. For smaller businesses which are not part of a group, it is more difficult to expand cross-border than for larger businesses. It is thus more burdensome for those smaller businesses to grapple with complex procedures and high compliance costs, as well as the uncertainty involved in investing their own assets in an unknown market. It is therefore evident that micro, small and medium-sized enterprises, at the initial stages of expansion, need a solution such as a simplified mechanism for the computation of their taxable result when they operate across the border exclusively by way of permanent establishments, as well as tax incentives to attract them.
Amendment 43 #
Proposal for a directive
Recital 3
Recital 3
(3) The variety of ways for doing business in the internal market requires different solutions for different businesses when it comes to tackling the current challenges posed by their cross-border operations. For smaller businesses which are not part of a group, it is more difficult to expand cross-border than for larger businesses. It is thus more burdensome for those smaller businesses to grapple with complex and highly bureaucratic procedures and high compliance costs. It is therefore evident that micro, small and medium-sized enterprises, at the initial stages of expansion, need a solution such as a simplified mechanism for the computation of their taxable result when they operate across the border exclusively by way of permanent establishments.
Amendment 45 #
Proposal for a directive
Recital 4
Recital 4
(4) To remedy tax uncertainty and the difficulty in complying with the rules of an unknown tax system when operating in (an)other Member State(s) (which is one of the key impeding factors for SMEs to expanding abroad), the taxable result of permanent establishments should be computed on the basis of the rules of the Member State where the Head Office (headquarters of the SME) is resident for tax purposes. This also means that the principles governing the attribution of income to a permanent establishment, set out in the applicable bilateral convention for the avoidance of double taxation between the Member State of the permanent establishment and the Member State of the Head Office, would also continue to apply. To ensure that any new rules constitute a source of simplification for SMEs, their application should be optional, and thus left to the choice of the taxpayer. Moreover, the application of these rules shall not, under any circumstances, lead to higher tax rates than the ones defined in the national tax legal frameworks.
Amendment 46 #
Proposal for a directive
Recital 4
Recital 4
(4) To remedy tax uncertainty and the difficulty in complying with the rules of an unknown tax system when operating in (an)other Member State(s) (which is one of the key impeding factors for SMEs to expanding abroad), the taxable result of permanent establishments should be computed on the basis of the rules of the Member State where the Head Office (headquarters of the SME) is resident for tax purposes. This also means that the principles governing the attribution of income to a permanent establishment, set out in the applicable bilateral convention for the avoidance of double taxation between the Member State of the permanent establishment and the Member State of the Head Office, would also continue to apply. To ensure that any new rules constitute a source of simplification for SMEs, their application should be optional, and thus left to the choice of the taxpayer and enough leeway should be provided for their application and adaptation to the new rules.
Amendment 49 #
Proposal for a directive
Recital 5
Recital 5
(5) To prevent abusive tax practices, specific anti-tax abuse rules are designed, for example to address the tax avoidance risks associated with transferring the tax residence of an SME, and thus to avoid that the location of the head office is determined on the basis of tax motives. Accordingly, it would be necessary to monitor the evolution of the turnover attributed to the permanent establishment(s) in order to maintain their operations as secondary to the main activity which should be carried out by the head office. In this way, the rules would not risk being misused by setting up empty head offices while the bulk of business activities takes place abroad. In the same vein, the eligibility to the tax simplification system as well as the termination and renewal of the option should be subject to strict conditions. Such conditions should be coupled with requirements relating to the turnover of the head office as compared to that of the permanent establishment(s). The aim would be to further underline that the business operated through the permanent establishment(s) can merely be an extension of the main activity of the head office. Additionally, once the option is made to apply the tax simplification framework, it should have an obligatory duration, to prevent situations where the residence of the head office is frequently moved to take advantage of occasional and short-term tax beneficial situations.
Amendment 54 #
Proposal for a directive
Recital 7
Recital 7
(7) The proposal aims to provide significant procedural simplification, thus a one-stop-shop should be put in place, whereby the tax filing, tax assessments and the collection of the tax due by the permanent establishment(s) would be dealt with through a single tax authority (‘filing authority’), i.e. the tax authority in the Member State of the head office. The one- stop-shop should provide all the features of simplification so it does not become another obstacle for businesses that wish to invest abroad. In full respect of Member States’ sovereignty in tax matters, audits, appeals and dispute resolution procedures would primarily be kept domestic and in accordance with the procedural rules of the respective Member State. To support the functioning of a one- stop-shop, it would be critical to provide for joint audits, which create an obligation tomean the Member State of the head office toshould cooperate if the tax authority of the permanent establishment requests an audit covering the computation of the taxable result of its taxpayer.
Amendment 57 #
Proposal for a directive
Recital 7 a (new)
Recital 7 a (new)
(7 a) The One-Stop-Shop (OSS) solution is valued by European SMEs and its creation shall represent an optional facilitation tool for the tax-related procedures of SMEs. The good experience with the VAT return via the OSS, with 130.000 companies filling their VAT return via the OSS and more than EUR 17 billion collected in VAT revenue, in 2022, motivates the model replication in the context of this Directive.
Amendment 61 #
Proposal for a directive
Recital 13 b (new)
Recital 13 b (new)
(13 b) As the potencial reduction of tax compliance costs by SMEs depends directly from their voluntary adoption of the rules set out in this Directive, an EU- wide information campaign towards SMEs must be envisaged by the Commission. Such information campaign shall be integrated in a wider communication strategy on the new tax- related EU legislation and its impact on EU businesses.
Amendment 62 #
Proposal for a directive
Recital 15
Recital 15
(15) A reasonable retention period is provided to allow Member States to comply with most of the statute of limitation rules, thus following closely such domestic rules in respect of its starting point or suspension. The retention period should not however go further than what is necessary to ensure that the competent tax authorities are able to determine the tax liabilities, thus striking a balance between the ability of the tax authority to ensure proper assessment and collection of taxes and taxpayers’ right to legal certainty.
Amendment 63 #
Proposal for a directive
Recital 18
Recital 18
(18) Since the objective of this Directive, namely the simplification of tax rules for certain SMEs operating cross border in the internal market through permanent establishment(s), cannot sufficiently be achieved by the Member States but can rather, by reason of the existing challenges which are caused by the interaction between 27 different national corporate tax systems, be better achieved at Union level, while respecting the national tax sovereignty of Member States, 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;
Amendment 64 #
Proposal for a directive
Recital 18
Recital 18
(18) Since the objective of this Directive, namely the simplification of tax rules for certain SMEs operating in the internal market through permanent establishment(s), cannot sufficiently be achieved by the Member States individually but can rather, by reason of the existing challenges which are caused by the interaction between 27 different corporate tax systems, be better achieved at Union level through mutual cooperation between Member States, 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;
Amendment 71 #
Proposal for a directive
Article 3 – paragraph 1 – point 1
Article 3 – paragraph 1 – point 1
(1) ‘permanent establishment’ means a fixed place of business situated in another Member State, as defined under the relevant bilateral convention on the avoidance of double taxation or, in absence thereof, in national law;Does not affect the English version.)
Amendment 75 #
Proposal for a directive
Article 3 – paragraph 1 – point 2
Article 3 – paragraph 1 – point 2
(2) ‘head office’ means an SME, as referred to in Article 2(1), which operates in (an)other Member State(s) exclusively through one or more permanent establishment;
Amendment 77 #
Proposal for a directive
Article 4 – paragraph 1 – point a
Article 4 – paragraph 1 – point a
Amendment 85 #
Proposal for a directive
Article 4 – paragraph 1 – point b
Article 4 – paragraph 1 – point b
(b) it has been resident for tax purposes in the head office Member State during the last two fiscal years;
Amendment 87 #
Proposal for a directive
Article 4 – paragraph 1 – point c
Article 4 – paragraph 1 – point c
(c) it has met the conditions laid down in Article 2(1), point d) for the last two fiscal years.
Amendment 90 #
Proposal for a directive
Article 4 – paragraph 2
Article 4 – paragraph 2
2. If the head office opts to apply the head office taxation rules in accordance with paragraph 1, it shallmay apply those rules to all its permanent establishments in other Member States. If it creates a new permanent establishment in another Member State, it shallmay apply head office taxation rules to such permanent establishment from the moment of its establishment.
Amendment 100 #
Proposal for a directive
Article 6 – paragraph 3 – subparagraph 4
Article 6 – paragraph 3 – subparagraph 4
If the filing authority concludes that the eligibility requirements are not met, it shall inform the head office within two months of the notification referred to in paragraph 1 and the head office may appeal against it in accordance with the national law and in turn the head office taxation rules shall continue to apply.
Amendment 105 #
Proposal for a directive
Article 7 – paragraph 1
Article 7 – paragraph 1
1. The head office that has opted to apply head office taxation rules to its permanent establishments in one or more host Member States shall apply those rules for a period of five fiscal yearsit deems appropriate and shall always notify the competent authority of its decision.
Amendment 109 #
Proposal for a directive
Article 7 – paragraph 2
Article 7 – paragraph 2
2. At the end of the period referred to in paragraph 1it deems appropriate, the head office taxation rules shall cease to apply in respect of the permanent establishments situated in the host Member States, after notifying the competent authority, unless the head office notifies to the filing authority its option to renew the application of the head office taxation rules, in accordance with the procedure set out in Article 9.
Amendment 111 #
Proposal for a directive
Article 8 – paragraph 1 – introductory part
Article 8 – paragraph 1 – introductory part
1. The option to apply the hHead oOffice tTaxation rules shall be terminated before the end of the five-year period referred to in Article 7(1) for any of the following reasonswhen:
Amendment 113 #
Proposal for a directive
Article 8 – paragraph 1 – point a
Article 8 – paragraph 1 – point a
(a) the SME referred to in Article 2(1) transfers its tax residence out of the head office Member State, if the SME wishes to stop applying the taxation rules;
Amendment 114 #
Proposal for a directive
Article 8 – paragraph 1 – point b
Article 8 – paragraph 1 – point b
(b) for the last two fiscal years, the joint turnover of its permanent establishments exceeded an amount which is equal to triple the turnover of the head officethe SME is no longer considered an SME.
Amendment 119 #
Proposal for a directive
Article 8 – paragraph 2
Article 8 – paragraph 2
2. In any of the cases referred to in paragraph 1, tThe head office taxation rules shall cease to apply as of the fiscal year that follows the one in which the reasons referred to in paragraph 1 occur.
Amendment 124 #
Proposal for a directive
Article 9 – paragraph 1
Article 9 – paragraph 1
1. If the head office wishes to renew its option, it shall notify the filing authority thereof at least six months before the end of the period referred to in Article 7(1) and shall list the names of the host Member States. The filing authority shall verify whether the SME continues to meet the eligibility requirements set out in Article 4.
Amendment 129 #
Proposal for a directive
Article 10 – paragraph 1 – introductory part
Article 10 – paragraph 1 – introductory part
The head office shall not be entitled to renew the option for applying the head office taxation rules if during the five-year period when head office taxation rules initially applied, any of the following situations occurred:the requirements for doing so set out in Article 4 are not met.
Amendment 130 #
Proposal for a directive
Article 10 – paragraph 1 – point a
Article 10 – paragraph 1 – point a
Amendment 133 #
Proposal for a directive
Article 10 – paragraph 1 – point b
Article 10 – paragraph 1 – point b
Amendment 136 #
Proposal for a directive
Article 10 – paragraph 1 – point c
Article 10 – paragraph 1 – point c
Amendment 150 #
Proposal for a directive
Article 12 – paragraph 1
Article 12 – paragraph 1
1. The head office shall settle, through the filing authority, the income tax liabilities with regard to both its taxable result and the taxable result of its permanent establishment(s) in the host Member State(s). if it so wishes. It may instead settle them through its establishment(s) if it sees fit.
Amendment 158 #
Proposal for a directive
Article 13 – paragraph 2
Article 13 – paragraph 2
2. The tax authorityies of the host Member State or the head office Member State may request that an audit be carried out jointly with the filing authority covering the computation of the taxable result of the permanent establishment in accordance with the head office taxation rules, the attribution of profits to the permanent establishment and/or the applicable tax rate. Joint audits shall be conducted in accordance with Council Directive 2011/16/EU18 . Notwithstanding the provisions in the aforementioned Directive, the requested competent authority shall accept such request by the authorities of the host Member State or the head office Member State. _________________ 18 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, p. 1)