Interest and royalty payments made between associated companies of different Member States - CIOT comments
The CIOT comments, sent to the European Commission on 10 January 2012, regarding the proposal for a Council Directive on a common system of taxation applicable to interest and royalty payments made between associated companies of Member States.
Our submission and the Council Directive to which it refers are available in Adobe (pdf) format.
In the Communication the Commission states its aim for the elimination of double taxation and explains that in its view current EU rules alone are not able to resolve double taxation where Member States exercise their parallel tax sovereignty. The Commission proposes, therefore, as well as the revision of existing EU Directives and the CCCTB, conclusion of more bilateral double tax conventions (DTCs) and to establish an 'EU Forum on Double Taxation' to elaborate a 'Code of Conduct on Double Taxation' based on the experience of the 'Joint Transfer Pricing Forum'.
Dispute resolution is another field addressed. Neither the Arbitration Convention nor DTCs offer a satisfactory solution as Arbitration Convention procedures are very time-consuming and double taxation conventions still based on the 'old' (pre-2008) Art.25 OECD Model Convention do not foresee a binding dispute resolution mechanism.
Technical Team
10 January 2012
