Canada - English


  • Service: Tax, International Tax Services
  • Date: 5/13/2014

EU Council Doesn’t Pass Amendments to Combat Hybrid Loans 

Global Tax Adviser


May 13, 2014


Ronan Carrig
GTA, Canadian Corporate Tax


The EU Council could not generate sufficient support for amendments to the EU Parent-Subsidiary Directive to prevent the use of cross-border hybrid loans and adopt anti-abuse rules at a meeting on May 6, 2014.

The amendments are expected to receive further expert input and be subject to continued discussions. The EU Council intends re-present the amendments for approval at a meeting in June.


The EU Commission issued a proposal to amend the EU Parent-Subsidiary Directive on November 25, 2013 to close loopholes such as hybrid financial mismatches not taxed in any member state and includes a new general anti-abuse rule. The Directive was designed to eliminate tax obstacles for profit distributions between parent companies and subsidiaries based in different EU member states. In particular, the Directive gives a tax exemption for dividends and other profit distributions paid by subsidiary companies to their parent companies to prevent companies from suffering double taxation within the Single EU Market. The proposal also introduces an anti-abuse provision to ensure that benefits are only granted on the basis of real economic substance.


For more information, contact your KPMG adviser.



Information is current to May 13, 2014. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500



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