Publication

10 September 2001

Group Taxation Domestically and Across Borders within Europe

The FEE Direct Tax Working Party has analysed the concept of group taxation in EU Member States, (both domestically and across borders within Europe). FEE have identified 4 clear recommendations as a result of this Europe-wide analysis.

FEE RECOMMENDS:

All Member States should implement the concept of domestic group taxation in general.

– In order to avoid unfair competition between companies in different EU-member states, FEE urges the EU to set minimum standards for group taxation. As a minimum, loss transfer between group companies wholly owned subsidiaries within all countries should be made possible.
– Secondly, elimination of taxation of intragroup transfers within all Member States would be welcomed.

To further assist cross-border trade, and in order to conform to the EU-principle of freedom of establishments, FEE urges the Member States to recognise permanent establishments as the head of fiscal unity. Furthermore, requirements of direct shareholdership need to be extended to include indirect shareholdership, should in order to allow group companies not being in direct line to set-off their losses within one country. Group taxation should apply to all 100% subsidiaries, whether directly or indirectly owned.

– The tax system of Member States should allow group taxation to apply with respect to all subsidiaries in that territory.
– In order to avoid discrimination, permanent establishments of the same foreign parent should be capable of inclusion in the local tax group.

Elimination of taxation of intragroup transfers within all Member States should be implemented to achieve tax neutrality. There should be no precondition that there should be accounting consolidation.

As only two countries allow group taxation of national sister companies held by a foreign parent, FEE feels that this poses a restriction on intra/EU business. FEE recommends that consideration be given to the preparation of guidelines or EU directives encouraging a broader application of taxation rules.

Position Paper

 

 

Related content

Consultation responseComment letter to the European Commission on Anti-Tax Avoidance Directive

30 May 2016

Consultation responseFEE responds to European Commission’s consultation on improving double taxation dispute resolution mechanisms

15 April 2016

Consultation responseFEE responds to the EC’s public consultation on relaunch of the Common Consolidated Corporate Tax...

8 January 2016

Consultation responseFEE comments on modernising VAT for cross-border e-commerce in the EU

16 December 2015

PublicationFEE issues views on the responsibility of the accountancy profession in tax

16 October 2015

Consultation responseFEE's response to EC's Public consultation on further corporate tax transparency

9 September 2015

Consultation responseFEE comments on the European Commission’s proposal for the mandatory automatic exchange of tax rulings

28 May 2015

PublicationFEE stimulates the tax policy debate in new publication

28 April 2015

Consultation responseFEE responds to OECD Discussion Drafts on the place of supply of business-to-consumer (B2C) services

16 February 2015

Consultation responseFEE comments on OECD Action 6 on base erosion and profit shifting (BEPS)

8 January 2015

PublicationTax Policy: A Matter for Society as a Whole'

2 December 2014

Consultation responseFEE comments on the proposed Council Directive amending EU Directive 2011/96/EU on the common system...

21 March 2014

Consultation responseFEE comments on the proposed Council Directive amending EU Directive 2006/112/EC as regards a standard...

21 February 2014

Consultation responseFEE comments on the VAT legislation on public bodies and tax exemptions in the public...

7 February 2014

Consultation responseFEE comments on EC Consultation on an EU Tax Identification Number

15 May 2013

Consultation responseOn 15 May 2013, FEE issued a comment letter to the EC on the EC...

15 May 2013

Consultation responseOECD International VAT/GST Guide lines – Draft Consolidated Version

16 April 2013

Consultation responseFEE comment letter to the European Parliament’s Economic and Monetary Affairs (ECON) Committee

30 November 2012

Consultation responseFEE Comment letter to the OECD

20 September 2012

Consultation responseEuropean Commission’s Communication on the future of VAT

20 September 2012

Sign up for our newsletter