The Council will try to reach political agreement on closing an important loophole in the Parent-Subsidiary Directive which has been used by some companies to escape taxation. Furthermore, the Greek Presidency of the Council will present a state of play of work on the common Financial Transaction Tax. Eleven Member States decided in February 2014 to proceed with the Financial Transaction Tax (FTT) through enhanced cooperation.
In November 2013, the Commission proposed amendments to the Parent-Subsidiary Directive, which included preventing specific tax planning arrangements (hybrid loan arrangements) from benefiting from tax exemptions. With this amendment, companies will no longer be able to exploit differences in the way Member States tax intra-group profit distributions, in order to avoid paying any tax at all. The result will be that the Parent-Subsidiary Directive can continue to ensure a level-playing field for businesses in the Single Market, without opening opportunities for aggressive tax planning.
This proposal was one of the actions announced by the Commission in its Action Plan to fight tax fraud and evasion.
The Greek Presidency of the Council will present a state of play of work on the common Financial Transaction Tax. Eleven Member States decided in February 2014 to proceed with the Financial Transaction Tax (FTT) through enhanced cooperation. The basis for their discussions has been the original Financial Transaction Tax proposal, put forward by the Commission in 2011. There are 3 core objectives to this Financial Transaction Tax (FTT) proposal. First, to strengthen the Single Market by reducing the number of divergent national approaches to financial taxation. Second, to ensure that the financial sector makes a fair contribution to public revenues. Third, to support regulatory measures in encouraging the financial sector to engage in more responsible activities, geared towards the real economy. Since enhanced cooperation was launched, there have been a number of technical working groups to discuss the proposal, involving all 28 Member States, as well as meetings between just the 11 Member States involved, at technical and political level.