Brussels, 7 December 2004
The European Commission has welcomed the political agreement by the EU's Council of Finance Ministers on a proposal to amend the EU Directive that provides for tax deferral in the case of cross-border mergers and divisions of companies, transfers of assets and exchanges of shares (90/434/EEC). The amendment that is based on a Commission proposal of October 2003 (see IP/03/1418) would, in particular, broaden the existing Directive's scope to cover a larger range of companies including the European Company (see IP/01/1376) and the European Co-operative Society (see IP/03/1071); provide for a new tax-neutral regime for the transfer of the registered office of a European Company or of a European Cooperative Society between Member States; clarify that the Directive applies in the case of the conversion of branches into subsidiaries; and cover a new type of operation, known as a 'partial division' or 'split-off'.
"I welcome the Council's political agreement on this proposal that will extend to a much larger range of companies a set of tax rules that facilitate cross-border corporate re-structuring" commented Taxation and Customs Commissioner László Kovács. "This amendment will become even more important on the entry into force of the company law cross-border Mergers Directive which seems to be on its way to agreement as a result of the Competitiveness Council's discussions two weeks ago."
The main elements of the proposal to improve the operation of the "Mergers" Directive are as follows:
For further information on the tax Mergers Directive see:
For information on the company law Mergers Directive see:
The text of the agreement on a Council Directive to amend Directive 90/434/EEC on the taxation of restructuring operations in the EU will soon be available on the Europa internet site: