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European Commission


Brussels, 2 April 2014

Fighting Tax Avoidance: Commissioner Šemeta welcomes Parliament vote on Parent-Subsidiary Directive

The European Parliament's today gave strong backing to the Commission's proposal to revise the Parent-Subsidiary Directive (see IP/13/1149). Following the vote, EU Tax Commissioner Algirdas Šemeta said:

"This proposal is a cornerstone in our campaign to clamp down on corporate tax avoidance. By closing loopholes and strengthening measures against abusive tax planning, it will help ensure that every company pays their fair share. The Parent-Subsidiary Directive remains a business-friendly law, enabling companies to work cross-border within our Single Market. The proposed revisions also make it a society-friendly law, 100% in line with our goals of fair and efficient taxation. I would like to thank Ms Kleva for her excellent work as rapporteur, and I am grateful to the European Parliament for their consistently strong support for our fight against tax evasion."


The Parent Subsidiary Directive is a key piece of corporate tax legislation, which aims to prevent double taxation of same group companies in Europe. However, loopholes in the Directive have been exploited by aggressive tax planners and have enabled some companies to escape corporate taxation. The Commission therefore proposed to tighten up the Directive in order to cut off specific opportunities for corporate tax avoidance. In particular, companies will no longer be able to exploit differences in the way intra-group payments are taxed across the EU to avoid paying any tax at all.

The result will be that the Parent-Subsidiary Directive can continue to ensure a level-playing field for honest businesses in the Single Market without opening opportunities for aggressive tax planning. This proposal was foreseen in the Commission's 2012 Action Plan against tax evasion (IP/12/1325).

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