Abstract
Tax planners and investors must understand the provisions of the Directive as well as the manner in which the Member States have implemented them. For U.S. businesses, the Directive presents a significant challenge because it may reduce costs for Community multinationals and will encourage more intra-Community investment rather than E.C. investment in the United States or elsewhere. While measures exist for U.S. businesses to qualify under the Directive, these measures have U.S. tax consequences. Essentially, the Directive forces U.S. companies with European operations to reconsider their corporate structure in the EC.
This article will address these issues. The next chapter begins with a brief overview of the institutional structure of the European Community, to explain the EC taxation decision-making process. Next, a discussion of the history of the direct tax directives follows, including the reasons for the prior lack of success in direct tax reform compared to that achieved with indirect taxation. The third chapter will then discuss the legal basis for the Community’s direct tax initiatives, the scope and intent of the individual provisions of the Directive, and the effect of Directive on double taxation treaties among both Member States and third countries.
The fourth chapter discusses the effect of the Directive itself as well as the implementation legislation adopted by the Member States. Finally, the fifth chapter explores the planning opportunities for U.S. enterprises, including several recommendations for changes in U.S. tax policy to enable U.S. businesses to respond to the EC initiatives.
Recommended Citation
Harris, Charles M. Jr.
(1994)
"The European Community's Parent-Subsidiary Directive,"
Florida Journal of International Law: Vol. 9:
Iss.
1, Article 6.
Available at:
https://scholarship.law.ufl.edu/fjil/vol9/iss1/6