On 8 July 2014 the Council of the European Union adopted amendments to Directive 2011/96/EU (the Parent-Subsidiary Directive). The amendments aim to prevent “hybrid” loan arrangements being used by cross-border corporate groups to secure double non-taxation.
As a result of the amendment, parent company jurisdictions will be required to tax any payments from a subsidiary that are tax deductible in the subsidiary company’s jurisdiction.
The amendments took effect from 14 August 2014, and require Member States to amend their national laws, if necessary in order to comply with the amended Directive, by 31 December 2015.
To view the announcement, click here.