Anti-abuse clause amending Parent-Subsidiary Directive approved

Thursday 11 December 2014

On December 9, 2014, the Economic and Financial Affairs Council approved an amendment to the Parent-Subsidiary Directive with the aim of preventing tax avoidance and aggressive tax planning by corporate groups. The Council agreed that it would introduce a binding anti-abuse clause as a "de minimis", which allows countries to apply stricter national rules as long as they meet minimum EU requirements in the Directive.

The anti-abuse clause is aimed at preventing misuses of the Parent-Subsidiary Directive and to ensure a greater consistency in its application within different Member States. It requires that governments refrain from granting the benefits of the Parent-Subsidiary Directive to an arrangement, or a series of arrangements, that are not "genuine" and have been put in place to obtain a tax advantage, while not reflecting economic reality. 

The amending directive will be adopted at a forthcoming Council session without further discussion and the Member States will have until December 31, 2015 to transpose this amendment of the Parent- Subsidiary Directive by introducing an anti-abuse rule into national law.
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