• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/7/2014

EU - Update on proposed amendments to Parent-Subsidiary Directive 

May 7: The Council of the EU (ECOFIN) yesterday had intended to adopt part of the European Commission’s proposed amendments to the EU Parent-Subsidiary Directive—i.e., the proposals to address the use of hybrid loans.

However, ECOFIN approval of the proposed amendment relating to hybrid loans was blocked, and also an agreement was not reached on a proposed general anti-avoidance rule amendment.

In order to become law, the proposed amending directive would have to be approved by all 28 EU Member States. While there has been broad support for the hybrid-loan aspect of the proposals, the directive was not approved because Sweden requested further assurance on certain technical aspects.

The EU Member States also did not agree with a proposed amendment to the existing anti-avoidance provision in the directive. In particular, there were concerns that, due to its general formulation, this could lead to different interpretations in different EU Member States and would create uncertainty for businesses.

Read a May 2014 report [PDF 174 KB] prepared by the KPMG EU Tax Centre: Proposal to amend the Parent-Subsidiary Directive

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