Uitkomsten van de Ecofin-raad 25 november 2003 (en)

Proposed Directive on transparency requirements

The Council agreed on a general approach on the European Commission's proposal for a Directive introducing minimum transparency requirements for information which must be provided by companies whose securities are traded on a regulated market, such as a stock exchange (see IP/03/436 and MEMO/03/68). The proposal, a key part of the Financial Services Action Plan, aims to enhance investor protection, attract investors to the European market place and improve the efficiency, openness and integrity of European capital markets. It would also remove certain national barriers linked to transparency requirements, which may discourage issuers from having their securities admitted to trading on more than one regulated market in the EU. In order to achieve these aims, the proposed Directive would upgrade the current level and frequency of the mandatory information that issuers have to provide to the markets throughout the financial year. It would also simplify requirements issuers must meet on the use of languages and on the way information is disseminated.

The text endorsed by the Council would introduce several advantages for issuers and investors:

• it would confirm the home country principle prohibiting the host Member State from imposing more stringent disclosure requirements on an issuer along the same line as already agreed under the Prospectus Directive (Directive 2003/71/EC). Thus, issuers quoted in several Member States would no longer face a patchwork of different transparency requirements

• it would require issuers to publish an annual financial report within four months after the end of their financial year so that capital markets no longer have to wait for the outcome of shareholder meetings

• it would require more detailed half-yearly financial reports for share issuers (based on IAS) and would introduce such a requirement for bond issuers (however, as regards Eurobond markets, a grandfathering clause would be introduced in favour of already existing Eurobonds for a period of seven years

• issuers would be required to publish interim management statements in between the annual report and the half-yearly report that should include a narrative description of the financial position and the impact of material events on that financial position (share issuers which already issue quarterly financial reports would be exempted from this requirement)

• it would significantly improve the notification regime on the disclosure of major shareholdings in companies whilst providing for tailor-made solutions with regard to the function of market makers, custodian banks, trading books of credit institutions and investment firms as well as the aggregation of shareholdings between asset management companies and their parent undertakings

• it would enable Europe to move to a system of EU-wide dissemination of corporate information which should be available to investors in all Member States

• it would ensure that the competent authority in the home Member State would be the same as under the Prospectus Directive

• it would also allow for detailed implementing measures to be adopted by the Commission after consulting Member States, regulators and other interested parties.

The European Council has recommended that this proposal be adopted by April 2004. The European Parliament is currently due to adopt its Opinion on the proposal in February 2004. If the Council were to agree all the amendments suggested by the Parliament in its first reading Opinion, the Directive could be adopted without the need for a second reading by the Parliament.

Value Added Tax (VAT) reduced rates

As regards the Commission proposal of July 2003 to simplifying the rules on reduced rates of VAT (see IP/03/1024 and MEMO/03/149), Ministers did not discuss any substantive issues. However, following discussions over lunch, the Council adopted a statement noting that all Member States would like current rules allowing Member States to temporarily apply reduced VAT rates to certain labour intensive services, that will expire on 31^st December 2003, to be extended for a further two years. Commission Bolkestein indicated to Ministers that the Commission would not present a proposal to extend this regime. In the absence of a Commission proposal, the Council cannot agree such an extension. Reports from Member States on the results of applying reduced VAT rates to labour intensive services indicated that in general, the reduced VAT rates were not passed on to consumers in terms of lower prices and that there was little effect on employment in these sectors. These reports are available on the Europa website:

<A onclick="popup(this.onclick="popup(this.href+'&noframes=1',0,0);return false" href+'&noframes=1',0,0);return false" HREF="http://europa.eu.int/comm/taxation_customs/taxation/labour_intensive/labour_intensive_en.htm">http://europa.eu.int/comm/taxation_customs/taxation/labour_intensive/labour_intensive_en.htm

Company taxation Communication

Commissioner Bolkestein presented the Commission's latest Communication on company taxation, which gives an overview of the Commission's efforts to remove the tax obstacles affecting businesses operating across frontiers within the Internal Market has just been presented by the Commission (see IP/03/1593 and MEMO/03/237). Mr Bolkestein categorically denied any suggestion that the Commission had any intention to propose harmonisation of company tax rates. On the contrary, he affirmed that the Commission supports fair tax competition, and pointed out that a single tax base for companies would increase comparability between Member States' tax rates and so favour competition.

Company tax EU Parent-Subsidiary Directive

The Council gave its agreement without discussion to the European Commission's proposal of this summer to amend the European Community's Parent-Subsidiary Directive (90/435/EEC) (see IP/03/1214). The Council's formal adoption of the proposal will not be possible until the Parliament has given its opinion on the proposal. The proposal is intended in particular to broaden the scope of the existing Directive to cover a larger range of companies, lower from 25% to 10% the inter-company holding threshold required for the application of its tax benefits and improve the mechanisms the Directive provides for the prevention of double taxation. The European Company which can be created from 2004 (see IP/01/1376) is among the new entities proposed for addition to the list of companies covered by the Directive.