| Ref | Amendment | Comments |
|---|
| Pt 4 | Circumvention of Directive  2003/48/EC through artificial channeling of an interest payment via an economic operator established outside the European Union should also be avoided. It is therefore necessary to specify the responsibilities of economic operators when they are aware that an interest payment made to an operator established outside the territorial scope of Directive 2003/48/EC is made for the benefit of an individual, known by them to be a resident of another Member State and who can be considered to be their customer. In such circumstances, those economic operators should be considered to be acting as paying agents. This would also in particular help to prevent a possible misuse of the international network of financial institutions (branches, subsidiaries, associated or holding companies) to circumvent Directive 2003/48/EC. | Routing payments through out of territory branches:
The EU Commission wants to follow the UK's HMRC example of mandating Paying Agents, whose headquarters are within jurisdiction, to apply the EUSD on its branches and subsidiaries. |
| Pt. 5 | Experience has shown that greater clarity is necessary regarding the obligation to act as a paying agent upon receipt of an interest payment. In particular, the intermediate structures which are subject to that obligation should be identified clearly. Entities and legal arrangements which are not subject to effective taxation should apply the provisions of Directive 2003/48/EC upon receipt by them of any interest payment from any upstream economic operator. An indicative list of such entities and legal arrangements in each Member State will facilitate the implementation of the new provisions. | Paying Agent Upon Receipt : Non taxed entities or arrangement within territory.
Non tax paying entities and arrangements within jurisdiction, according to Annex III, will become paying agents upon receipt. |
Art 4
par 1 | An economic operator established in a Member State shall also be considered to be a paying agent for the purposes of this Directive where the following conditions are met:- it makes an interest payment to, or secures such a payment for, another economic operator, including a permanent establishment or a subsidiary of the first economic operator, established outside the territory referred to in Article 7 and outside the territorial scope of agreements and arrangements providing for the same or equivalent measures to those of the Directive, and
- the first economic operator has reasons to believe, on the basis of available information, that the second economic operator will pay the income to, or secure such a payment for the immediate benefit of a beneficial owner who is an individual known by the first economic operator to be a resident of another Member State, having regard to Article 3.
| Routing payments through out of territory network:
Note: These clauses could be the basis in future to mandate banks with head-office in the EUSD jurisdiction to apply the EUSD for payments to branches outside the EUSD jurisdiction. |
Art 4
Par 2 | An entity or a legal arrangement which has its place of effective management within a Member State and which is not subject to effective taxation under the general rules for direct taxation applicable either in that Member State, or in the Member State where it is established, or in any country or jurisdiction where it is otherwise resident for tax purposes, shall be considered to be a paying agent upon receipt of an interest payment or upon securing of such payment. For the purposes of this paragraph, the categories of entities and legal arrangements referred to in the indicative list of Annex III shall be considered to be not subject to effective taxation. Where an entity or a legal arrangement does not belong to any of the categories referred to in the indicative list of Annex III or where it is covered by that annex but claims to be subject to effective taxation, the economic operator shall establish whether it is subject to effective taxation on the basis of facts that are generally acknowledged or on the basis of official documents presented by the entity or legal arrangement or available through customer due diligence measures taken in accordance with Directive 2005/60/EC. | Paying Agent Upon Receipt: Non-taxed entities and arrangements within the territory:
This includes all untaxed entities and arrangements in the world which are effectively managed within the jurisdiction of the EUSD.
Funds: This also means that funds within the EUSD jurisdiction, which fall below the 25% debt threshold and which do not pay tax could be candidates for Paying Agents upon Receipt |
