What changed between the plenary report and the adopted text

Article 22 – paragraph 1: 1. The financial accounting net income or loss of a BEFIT group member shall be adjusted to exclude in the fiscal year of acquisition any fixed tangible asset that has a book value before depreciation which is below EUR 7500.

Article 22 – paragraph 2 – point a: (a) all buildings as well as any other type of immovable property and structure in use for the business, with the exception of industrial buildings and structures: 30 years;

Article 22 – paragraph 2 – point a a (new): (aa) industrial buildings and structures: 25 years;

Article 22 – paragraph 2 – point b: (b) all other fixed tangible assets: their useful life as assessed in accordance with the acceptable accounting standard in the Union referred to in Article 7, but with a minimum of 10 years;

Article 22 a (new): Article 22a / Accelerated depreciation rules / 1. By way of derogation from Article 22, fixed tangible assets acquired by BEFIT group members in the following categories shall be subject to accelerated depreciation by Member States: / a) assets that contribute directly to the Union’s climate and social goals, in particular the enhancement of clean technology, energy efficiency and digitalisation; / b) assets that contribute directly to the attainment of the UN 2030 Sustainable Development Goals; / c) assets that contribute directly to the enhancement of the Union's defence, notably its ability to prevent and respond to emerging threats and crises, in accordance with the Preparedness Union Strategy. / 2. The Commission shall, by means of implementing act, lay down the necessary framework and criteria to operationalise paragraph 1, including the categories of assets eligible for accelerated depreciation. Every 5 years, the Commission shall conduct an assessment of the accelerated depreciation regime in paragraph 1, analysing, in particular whether the measures: / a) are fit for purpose, / b) are a cost-effective way to achieve their policy objectives, / c) have any negative or unexpected implications. / Following the assessment referred to in the first subparagraph, the Commission shall update the implementing act every 5 years, where deemed necessary. Implementing acts under this Article shall be adopted in accordance with the examination procedure referred to in Article 73. /…

Article 23 – paragraph 5 a (new): 5a. Member States shall not grant further entitlements to depreciate to a BEFIT group member other than those specified in this Section.

Article 25 – paragraph 1: 1. Acquisition costs, construction costs or improvement costs, together with the date of entry into use after acquisition, construction or improvement, shall be recorded in a fixed asset register within the BEFIT group for each fixed asset separately.

Article 38: Where a company or a permanent establishment enters a BEFIT group, any unrelieved losses incurred up to five years before the entry date, in accordance with the corporate tax law of the Member State of its tax residence or location respectively, shall be deducted from its share of the BEFIT tax base as determined in accordance with Chapter III.

Article 41 – paragraph 1 – subparagraph 1: Notwithstanding Article 9, where, as a result of a disposition of shares, a BEFIT group member leaves the BEFIT group and during that or the previous fiscal year, this BEFIT group member acquired, in an intra-BEFIT group transaction, one or more fixed assets, the amount corresponding to the gain or loss arising from the intra-BEFIT group disposition of these fixed assets shall be included in the financial accounting net income or loss of the BEFIT group member which owned the assets prior to the intra-BEFIT group disposition.

Article 41 – paragraph 1 – subparagraph 2: The first subparagraph shall not apply if the BEFIT group member demonstrates that the intra-BEFIT group transaction was carried out for valid commercial reasons within the meaning of Article 15(1), point (a), of Directive 2009/133/EC.

Article 42 – paragraph 2 – point b: (b) a negative amount, the loss shall be set off against the taxable income of the ultimate parent entity and shall be carried forward for a maximum of 5 years and set off against the next positive BEFIT tax base. The deduction shall be in proportion to the holding of the ultimate parent entity in its qualifying subsidiaries as referred to in Article 3(1) and in full for permanent establishments. The reduction of the tax base of the resident taxpayer shall not result in a negative amount.

Article 43 – paragraph 1 a (new): 1a. The Commission shall provide clear and harmonised criteria for determining beneficial ownership. Those criteria shall aim to ensure the consistent application of the exemption system, reduce legal uncertainty, and prevent abuse. The criteria shall be developed in consultation with Member States and aligned, where appropriate, with international standards.

Article 45 – paragraph 1 – subparagraph 1: For each fiscal year between 1 July 2028 and 30 June 2033 at the latest (the ‘transition period’), the BEFIT tax base shall be allocated to the BEFIT group members in accordance with the baseline allocation percentage.

Article 45 – paragraph 1 – subparagraph 2: For groups that become subject to this Directive after the end of the first fiscal year when this Directive starts to apply, the transition period referred to in the first subparagraph shall be terminated by 30 June 2033 at the latest.

Article 45 – paragraph 3 – point a: (a) low-risk zone: where the expense incurred, or the income earned, by a BEFIT group member from intra-BEFIT group transactions increase in a fiscal year by less than 15% compared to the average expense or income of the previous three fiscal years from intra-BEFIT group transactions;

Article 45 – paragraph 3 – point b: (b) high-risk zone: where the expense incurred, or the income earned, by a BEFIT group member from intra-BEFIT group transactions increase in a fiscal year by 15% or more compared to the average expense or income of the previous three fiscal years from intra-BEFIT group transactions.

Article 45 – paragraph 5: 5. Notwithstanding Article 13(2), the exceeding borrowing costs as referred to in Article 2 of Council Directive (EU) 2016/1164 which arise from a transaction between BEFIT group members shall not be recognized for the purpose of computing the baseline allocation percentage of the BEFIT group member which incurs such costs. Member States shall take appropriate measures to encourage undertakings to reduce those risks.

Article 45 – paragraph 9: deleted

Article 45 – paragraph 10: 10. The rules laid down in paragraphs 1 to 8 shall continue to apply until the entry into force of any amendment proposed pursuant to Article 77(1b).

Article 48 – paragraph 2: 2. In addition to the adjustments listed in paragraph 1, a Member State may, subject to Directive (EU) 2022/2523, allow for increasing or decreasing, through additional items, the allocated part of BEFIT group members that are resident for tax purposes or situated in the form of a permanent establishment in that Member State.

Article 48 – paragraph 2 a (new): 2a. A Member State providing incentives for research and development shall refrain from offering output-based incentives, such as patent boxes, which would decrease the allocated part of BEFIT group members that are resident for tax purposes or situated in the form of a permanent establishment in that Member State.

Article 48 – paragraph 2 b (new): 2b. In order to prevent double taxation arising from the interaction between this Directive and bilateral tax treaties with third countries, Member States shall, where applicable, provide corresponding adjustments in accordance with their treaty obligations. The Commission may facilitate coordination and, where appropriate, issue guidelines to promote a consistent application across Member States.

Article 57 – paragraph 2: 2. The BEFIT information return shall be submitted to the filing authority no later than six months after the end of the fiscal year.

Article 57 – paragraph 3 a (new): 3a. For the purposes of paragraph 3, point (d)(ii), all supporting documentation that was used to build the BEFIT tax base referred to in that provision shall be kept for 10 years in order to be made available to the competent authorities of all Member States in which the BEFIT group members are resident for tax purposes or situated in the form of a permanent establishment.

Article 57 – paragraph 4 a (new): 4a. BEFIT teams shall use all existing procedures and arrangements offered by Directive 2011/16/EU1a to ensure an efficient cooperation and exchange of information between national tax administrations. / 1a Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, p. 1, ELI: http://data.europa.eu/eli/dir/2011/16/oj).

Article 58 – paragraph 1: 1. The filing entity shall notify the filing authority of errors in the BEFIT information return within three months of the timely submission of such return.

Article 60 – paragraph 2 a (new): 2a. Member States shall attribute adequate human resources to the BEFIT team, including by providing content and language training to the BEFIT team representatives.

Article 60 – paragraph 3: 3. Information communicated between the members of a BEFIT team, shall be provided by electronic means to the extent possible, via a secure connection or a secure network, through making use of a BEFIT collaborative tool.

Article 60 – paragraph 4: 4. To facilitate the operation and communication of the BEFIT team, the Commission shall, by means of implementing acts, standardise the communication of the information between the members of a BEFIT team through making use of a BEFIT collaborative tool and support the secure transmission of information. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 73.

Article 63 – paragraph 1: 1. A BEFIT group member shall notify the competent authority of the Member State in which it is resident for tax purposes or situated in the form of a permanent establishment of errors in the individual tax return within three months of the timely submission of such return.

Article 65 – paragraph 1: 1. The competent authority of a Member State may initiate and coordinate audits of BEFIT group members that are resident for tax purposes or situated in the form of a permanent establishment in that Member State. That competent authority shall notify the other BEFIT team members within one month of the initiation of such an audit.

Article 67 – paragraph 1: 1. A BEFIT group member may appeal against the content of the individual tax assessment made pursuant to Article 64 before the competent authority of the Member State where that BEFIT group member is resident for tax purposes or situated in the form of a permanent establishment within 3 months of the assessment being notified to it. The administrative appeal shall be heard by an administrative body that, in accordance with the law of the Member State of the BEFIT group member, is competent to hear appeals at first instance. The administrative appeal shall be governed by the law of the Member State in which the BEFIT group member is resident for tax purposes or situated in the form of a permanent establishment. Where there is no such administrative body in the Member State where the BEFIT group member is resident for tax purposes or situated in the form of a permanent establishment, the BEFIT group member may lodge a judicial appeal directly.

Article 68 – paragraph 1: 1. Where the decision pursuant to Article 66 has been confirmed or varied, the filing entity shall have the right to appeal directly to the courts of the Member State where it is resident for tax purposes or situated in the form of a permanent establishment within 3 months of the receipt of the decision of the administrative appeals body. A judicial appeal shall be governed by the law of the Member State where the filing entity is resident for tax purposes or situated in the form of a permanent establishment.

Article 69 – paragraph 1: 1. Where the decision pursuant to Article 67 has been confirmed or varied, a BEFIT group member shall have the right to appeal to the courts of the Member State where it is resident for tax purposes or situated in the form of a permanent establishment within 3 months of the decision of the administrative appeals body referred to in Article 67 being notified to it. The judicial appeal shall be governed by the law of the Member State in which the BEFIT group member is resident for tax purposes or situated in the form of a permanent establishment.

Article 70 – paragraph 1: Where the outcome of an administrative or judicial appeal requires amendments to the tax assessment of the BEFIT group or to the individual tax assessment of one or more members of a BEFIT group, Member States shall take the appropriate measures to ensure that such amendments remain possible, within a timeframe of 10 years.

Article 72 – paragraph 1: Member States shall lay down rules on penalties applicable to infringements of national provisions adopted pursuant to this Directive and shall take all necessary measures to ensure that they are implemented and enforced. Penalties and compliance measures provided for shall be effective, proportionate and dissuasive. Penalties shall be set at a minimum of 0,1 % of the turnover of the BEFIT group in the event of a failure to file the BEFIT information return in accordance with Article 59 and in the event of a deliberate misreporting in a BEFIT information return.

Article 77 – paragraph 1 a (new): 1a. As part of the evaluation of BEFIT referred to in paragraph 1, the Commission shall carry out a comprehensive review of the transition rule and develop a permanent method for the allocation of the BEFIT tax base. The development of the permanent method shall be preceded by a comprehensive impact assessment and appropriate stakeholder consultations, in accordance with the Commission’s Better Regulation principles.

Article 77 – paragraph 1 b (new): 1b. Before the end of the transition period, the Commission shall submit a legislative proposal to amend this Directive and introduce a permanent method for the allocation of the BEFIT tax base that replaces the transitional allocation formula. The permanent method for the allocation of the BEFIT tax base shall take into account the conclusions of the comprehensive impact assessment and shall incorporate the following four factors: sales, labour, assets and digital presence.

Article 77 – paragraph 2: 2. Member States shall communicate to the European Parliament and to the Commission relevant information for the evaluation of the Directive in accordance with paragraph 3, including aggregated data on BEFIT group members which are resident for tax purposes in their jurisdiction and permanent establishments thereof operating in their jurisdiction, in order to properly assess: / (i) the impact of the transition allocation rule; / (ii) the link with other legislative acts in the area of corporate taxation, namely Directive (EU) 2022/2523 as well as the situation regarding Pillar One of the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy agreed by the OECD/G20 Inclusive Framework on BEPS on 8 October 2021; / (iii) the relevance of the scope of this Directive and notably its potential extension to large groups as referred to in Article 3(7) of Directive 2013/34/EU; / (iv) the relevance of removing the exclusion of shipping income from the preliminary tax result; / (v) the impact on double tax treaties; / (vi) the impact of the co-existence of two tax systems, at Union level and at national level, on the administrative burden for entrepreneurs and tax administrations resulting from the application of Section 5 of Chapter II; / (vii) the impact of the allocation of the tax base on Member State revenues; / (viii) the impact of the co-existence of distribution-based tax systems, as referred to in Article 49, with traditi…

Article 77 – paragraph 4: 4. Information communicated to the European Parliament and to the Commission under paragraph 2 shall be kept confidential by the Commission in accordance with the provisions applicable to Union institutions and Article 76 of this Directive.