23 Amendments of Isabel BENJUMEA BENJUMEA related to 2023/0322(CNS)
Amendment 45 #
Proposal for a directive
Recital 2
Recital 2
(2) The globally recognised standard for determining the prices between associated enterprises for tax purpose is the so called “arm’s length principle”. The arm’s length principle prescribes that individual group members of a MNE must transact with each other as if they were independent third parties. In other words, the transactions between two associated enterprises should reflect the outcome that would have been achieved if the parties were not related i.e. if the parties were independent of each other and the outcome (price or margins) was determined by (open) market forces.
Amendment 54 #
Proposal for a directive
Recital 3
Recital 3
(3) Where Member States apply or interpret the arm’s length principle differently, they create situations that could harm the internal market. Inconsistency in applicable transfer pricing rules not only could lead to double taxation but also allow for profit shifting and tax avoidance. Such inconsistency is a serious tax obstacle for businesses operating across borders, especially SMEs. This is likely to cause economic distortions and inefficiencies and has a negative impact on cross-border investment and growth.
Amendment 60 #
Proposal for a directive
Recital 4 a (new)
Recital 4 a (new)
(4a) This Directive should aim to harmonise certain procedural and governance aspects of transfer pricing in all Member States in order to provide greater consistency and increase tax certainty in the Union. Such harmonisation should not mean unification, as the freedom of the Member States to compete through their tax decisions and the exclusivity of their competences in this area should be respected.
Amendment 65 #
Proposal for a directive
Recital 6
Recital 6
(6) To ensure the mitigation of double taxation, Member States should have adequate mechanisms in place to enable them, when a primary adjustment is made in another Member State or third country jurisdiction, to make a corresponding adjustment. In particular, Member States should have the possibility to perform corresponding adjustments and should not limit the granting of such an adjustment in the context of mutual agreement procedures (MAPs) but also as a result of: (i) a “fast-track” procedure to be concluded in 180 days without the need to open a MAP when there is no doubt that the primary adjustment is well founded; or (ii) joint audits or other forms of international cooperation such as multilateral risk assessment programs like the European Trust and Cooperation Approach (ETACA) and the International Compliance Assurance Programme (ICAP). If the 180- day "fast-track" deadline is to be a success and a positive step forward in effectively avoiding double taxation, improving cooperation between tax authorities and ensuring a more binding application of the arm's length principle, it will be essential for this to be a binding deadline for tax authorities.
Amendment 68 #
Proposal for a directive
Recital 7
Recital 7
(7) There may be legitimate reasons as to why a corresponding adjustment is not given or is less than the primary adjustment. In particular, Member States should not grant corresponding adjustments if: (i) the primary adjustment is not considered to be consistent with the arm’s length principle; (ii) the primary adjustment does not result in the taxation of an amount of profits in another jurisdiction on which the associated enterprise in the relevant Member State has already been subject to tax; and (iii) when a third country jurisdiction is involved, there is no tax treaty in place. In the absence of a primary adjustment, Member States may perform a downward adjustment only if: (i) the downward adjustment is consistent with the arm’s length principle: (ii) an amount equal to the downward adjustment is included in the profit of the associated enterprise in the other jurisdiction and therein subject to tax: and (iii) a communication on the intention to perform a downward adjustment has been sent to the relevant jurisdiction. The aim of the previous provisions is to ensure that: (i) Member States can preserve the right to assess whether the primary adjustment is at arm’s length; and (ii) there is neither double taxation nor double non- taxation. Member States should not create situations of double non-taxation. However, the exclusive competence of the Member States in tax matters and thus their own decisions must be respected at all times.
Amendment 69 #
Proposal for a directive
Recital 9 a (new)
Recital 9 a (new)
(9a) This Directive will lead to an increase in litigation in the different Member States where it will be applied, meaning that mechanisms will be needed to be able to respond to claims, thus avoiding problems and disputes between companies and States. Litigation will have to be simple and quick in order to resolve disputes in a consensual manner in the shortest possible timeframe and with the least possible impact on business.
Amendment 75 #
Proposal for a directive
Recital 12 a (new)
Recital 12 a (new)
12a The proposed codification of the arm's length principle and the OECD Guidelines should improve certainty and reduce litigation. Transfer pricing disputes are often based on divergent interpretations of the specific facts and circumstances rather than on interpretations of the Guidelines. With a view to avoiding the risk of regulatory duplication and contradiction due to changes in the OECD Guidelines, the latter shall take precedence over transfer pricing.
Amendment 77 #
Proposal for a directive
Recital 13
Recital 13
(13) In order to minimise disputes and ensure a common approach across the Union, this Directive further provides that a taxpayer should not be subject to adjustment when its results fall within the interquartile range unless the tax administration or the taxpayer proves that a specific different positioning in the range is justified by the facts and circumstances of the specific case. When the results of a controlled transaction fall outside the arm's length range, tax administrations should be required to make an adjustment to the median of all the results unless the taxpayer or the tax administration proves that any other point of the range determines a more reliable arm’s length price in a given case. Transfer pricing disputes often concern points within the interquartile range or indicators. The main source of disputes stems from divergent perspectives on the facts and circumstances of a particular transaction. Therefore, an interquartile range will not reduce disputes but will lead to more closed positions on facts and circumstances, reducing flexibility in dispute settlement, in particular with third countries.
Amendment 83 #
Proposal for a directive
Recital 15
Recital 15
(15) The rules provided by this Directive should be applied in in a manner consistent with the OECD Transfer Pricing Guidelines. These rules must not contradict the guidelines adopted in the framework of the OECD, as this would create a climate of uncertainty for businesses, especially for SMEs.
Amendment 96 #
Proposal for a directive
Recital 18
Recital 18
(18) To allow businesses to directly enjoy the benefits of the internal market without incurring an unnecessary additional administrative burden, information on the tax provisions set out in this Directive should be made accessible through the Single Digital Gateway (‘SDG’) in accordance with Regulation (EU) 2018/172434. The SDG provides a one-stop-shop for cross-border users for the online provision of information, procedures and assistance services relevant to the functioning of the internal market. This one-stop shop should be intuitive, easy to access and equipped with the necessary tools so that it does not create a new bureaucratic barrier for businesses. The positive experience of the one-stop shop for Value Added Tax (VAT) is a good example of how it should be designed to work properly. _________________ 34 Regulation (EU) 2018/1724 of the European Parliament and of the Council of 2 October 2018 establishing a single digital gateway to provide access to information, to procedures and to assistance and problem-solving services and amending Regulation (EU) No 1024/2012 (OJ L 295, 21.11.2018, p. 1).
Amendment 101 #
Proposal for a directive
Article 1 – paragraph 1
Article 1 – paragraph 1
This Directive lays down rules to harmonise transfer pricing rules of Member States and to ensure a common application of the arm’s length principle within the Union with the aim of presenting a simplification of administrative processes for SMEs and reducing red tape for them.
Amendment 105 #
Proposal for a directive
Article 3 – paragraph 1 – point 1
Article 3 – paragraph 1 – point 1
Amendment 113 #
Proposal for a directive
Article 4 – paragraph 1
Article 4 – paragraph 1
1. Member States shall ensure that, where an enterprise engages in one or more commercial or financial cross-border transactions with an associated enterprise, such enterprise determines the amount of its taxable profits in a manner that is consistent with the arm’s length principle and the OECD Guidelines.
Amendment 119 #
Proposal for a directive
Article 5 – paragraph 1 – point b
Article 5 – paragraph 1 – point b
(b) a person participates in the control of another person through a holding that exceeds 250 % of the voting rights;
Amendment 121 #
Proposal for a directive
Article 5 – paragraph 1 – point c
Article 5 – paragraph 1 – point c
(c) a person participates in the capital of another person through a right of ownership that, directly or indirectly, exceeds 250 % of the capital;
Amendment 125 #
Proposal for a directive
Article 5 – paragraph 1 – point d
Article 5 – paragraph 1 – point d
(d) a person is entitled to 250 % or more of the profits of another person.
Amendment 132 #
Proposal for a directive
Article 6 – paragraph 3 – point b
Article 6 – paragraph 3 – point b
(b) Member States shall declare the request admissible within 30 days by virtue of a notification to the taxpayer if all the information provided in paragraph 3, point (a), has been submitted. In the same timeframe, Member States shall notify the taxpayer of the lack of any necessary information and grant at least 360 days to provide it. If the taxpayer does not provide the requested information within the assigned deadline, the request may be rejected as inadmissible.
Amendment 134 #
Proposal for a directive
Article 6 – paragraph 3 – point c
Article 6 – paragraph 3 – point c
(c) Member States shall ensure that when the double taxation arises from a primary adjustment made in another Member State, the procedure is concluded within 180 days from the receipt of the taxpayer’s request with a reasoned act of acceptance or rejection. This deadline shall be binding on the tax authorities.
Amendment 136 #
Proposal for a directive
Article 6 – paragraph 3 – point d
Article 6 – paragraph 3 – point d
(d) In the case of acceptance, Member States shall communicate immediately to the tax authority of the other relevant jurisdiction the recognition of the corresponding adjustment.
Amendment 155 #
Proposal for a directive
Article 12 – paragraph 4 a (new)
Article 12 – paragraph 4 a (new)
4a. Owing to the fact that transfer pricing disputes often relate to points within the interquartile range or relative to benchmarks, this can lead to disputes about the facts and circumstances of particular transactions. Therefore, interquartile ranges will not reduce litigation. Contrary to what is being sought to be achieved, they may lead to more closed positions on facts and circumstances, diminishing flexibility in dispute resolution, in particular in relations with third countries.
Amendment 157 #
Proposal for a directive
Article 13 a (new)
Article 13 a (new)
Article 13a Settlement of disputes 1. Owing to the potential increase in litigation, this Directive requires the introduction of fast-track mechanisms which can respond to all demands. The arbitration system needs to be quick so that agreements can be reached, thereby avoiding problems and disputes that may arise. The use of Advance Pricing Agreements (APAs) should therefore be encouraged to strengthen dispute prevention and resolution mechanisms in the European Union. This should involve allocating more resources to tax administrations to speed up the processing times for APAs, increasing legal certainty for EU companies. 2. The presence of accessible dispute resolution mechanisms is of vital importance for cross-border trade, thus ensuring tax certainty and eliminating double taxation for taxpayers. Strengthening the use of Mutual Agreement Procedures (MAPs) as outlined in the EU Arbitration Convention can speed up the resolution of cases within shorter timeframes. To this end, States are invited to allocate adequate resources so that deadlines are met and Mutual Agreement Procedures (MAPs) can become an effective tool to eliminate double taxation.
Amendment 158 #
Proposal for a directive
Article 13 b (new)
Article 13 b (new)
Article 13b Extension of the European Trust and Co- operation Approach (ETACA) initiative 1. It is necessary to broaden the focus and scope of the European Trust and Cooperation Approach (ETACA) to include transfer pricing reviews of specific intra-EU flows by participating Member States and not only low value- added transactions, as is currently the case. 2. Broadening the focus and scope will contribute to a more comprehensive and efficient approach to transfer pricing issues, with ex ante tax certainty that will eliminate subsequent tax disputes. States will thus need to agree on common definitions of the process and the main practical aspects. 3. It is recommended that a link be established between the ETACA and APAs to ensure the ETACA acts as a fast- track for finding stable solutions when problems arise during the review process.
Amendment 159 #
Proposal for a directive
Article 13 c (new)
Article 13 c (new)
Article 13c Re-establishment of the EU Joint Transfer Pricing Forum 1. The EU Joint Transfer Pricing Forum has offered practical solutions to the challenges posed by transfer pricing practices in all Member States. 2. The re-establishment of this forum with a broader mandate allows national experts from the Member States, together with representatives of the business community, to support the Commission, which may result in legislation capable of achieving the stated objective of increasing security for business in the European Union. A joint view of taxpayers and tax authorities provides a more comprehensive point of view when it comes to finding practical solutions.