UK and International Tax news

EU Adopts Amendment To Parent Subsidiary Directive

Friday 11th July 2014

Following political agreement at the meeting in June 2014 [see our International Tax News item of 23 June 2014], the European Council [Economic and Financial Affairs] confirmed on 8 July 2014 that it had adopted an amendment to EU tax rules that will prevent double non taxation of dividends distributed within corporate groups deriving from hybrid loan arrangements.

The amendment to the parent-subsidiary directive [2011/96/EU] will prevent cross border companies from planning their intra group payments so as to result in double non taxation where hybrid loans are involved.  The member state of the parent company will only be able to exempt taxing profits from the subsidiary provided such profits are not tax deductible for the subsidiary.

Member states will have until 31 December 2015 to transpose it into national law.

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