Einde inhoudsopgave
Treaty Application for Companies in a Group (FM nr. 178) 2022/4.3.4.2
4.3.4.2 Cross-border restructurings in the EU
L.C. van Hulten, datum 06-07-2022
- Datum
06-07-2022
- Auteur
L.C. van Hulten
- JCDI
JCDI:ADS659409:1
- Vakgebied(en)
Omzetbelasting / Plaats van levering en dienst
Voetnoten
Voetnoten
Council Directive 2009/133/EC of 19 October 2009 on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different Member States and to the transfer of the registered office of an SE or SCE between Member States (a recast of Council Directive 90/434/EEC of 23 July 1990).
MD, preamble, par. 2.
MD, preamble, par. 5.
Art. 4 MD.
Art. 5 and 6 MD.
E.g., art. 10 of the MD. The article applies if assets are transferred in a merger, a division, a partial division or a transfer of assets that include a permanent establishment of the transferring company which is situated in another Member State. In the aforementioned situation the Member State of the transferring company shall renounce any right to tax that permanent establishment. In this manner juridical double taxation is eliminated.
E.g., art. 7 of the MD. The article applies for mergers, divisions and partial divisions. EU taxation on capital gains – if the minimum holding percentage of 10% is met – is restricted both in the residence and source state. In this manner economic double taxation is eliminated.
MD, preamble, par. 13.
G.F. Boulogne, Shortcomings in the EU Merger Directive, Alphen aan den Rijn: Kluwer Law International 2016, p. 35.
G.F. Boulogne, Shortcomings in the EU Merger Directive, Alphen aan den Rijn: Kluwer Law International 2016, p. 88.
G.F. Boulogne, ‘Chapter 7: The Tax Merger Directive’, par. 7.2 and 7.3, inP.J. Wattel, O.C.R. Marres & H. Vermeulen (eds.), European Tax Law. Volume 1 - General Topics and Direct Taxation (Fiscale Handboeken nr. 10), Deventer: Wolters Kluwer 2018.
G.F. Boulogne, ‘Chapter 7: The Tax Merger Directive’, par. 7.8.5, inP.J. Wattel, O.C.R. Marres & H. Vermeulen (eds.), European Tax Law. Volume 1 - General Topics and Direct Taxation (Fiscale Handboeken nr. 10), Deventer: Wolters Kluwer 2018.
MD, preamble, par. 14.
If a cross-border restructuring is treated less favourably, this would be an obstacle for the cross-border grouping and regrouping of companies and negative for the functioning of the internal market. Therefore, the MD1 aims to remove tax barriers in the case of mergers, divisions, partial divisions, transfers of assets and exchanges of shares with respect to companies from different Member States, and to the transfer of the registered office, of an SE or SCE, between Member States. Harmonized rules will give the company the opportunity to adapt to the requirements of the internal market, increase productivity, and strengthen competitiveness at an international level.2 Apart from preventing taxes from being levied, the financial interests of the Member State of the transferring or acquired company should be safeguarded.3 The principal relief provided for in the Directive is the deferral of tax on gains.4 Additionally, the MD provides specific rules regarding the carry-over of tax attributes in the form of provisions, reserves and losses.5
The goal of the Directive is to eliminate obstacles to the functioning of the internal market, such as double taxation.6 This can entail both juridical7 and economic8 double taxation. The benefit resulting from the application of the Directive can be denied by the Member States if the objective of the transaction is tax evasion or avoidance.9
The MD is limited in scope. Not all cross-border operations it might be expected to cover given its objective are indeed covered. Not all entities that can engage in cross-border restructuring activities are covered.10 Moreover, cross-border liquidations, for example, do not fall within the scope of the Directive.11 Additionally, it solely deals with the immediate tax problems that arise as a result of the merger. Long-term and/or recurrent tax problems are not within its scope, as that would require a certain extent of harmonization of the systems of Member States.12 It still leaves a considerable risk of economic double taxation because it does not prescribe how to value the shares received by the transferring company in a transfer of assets or by the acquiring company in an exchange of shares.13 According to the preamble it is up to the Member States to eliminate double taxation if that is not successfully done by the Directive.14