The EU's Council of Economic and Finance (ECOFIN) Ministers meeting took place last month with amendments to the Parent Subsidiary Directive and the FTT high on the tax agenda.

The Council discussed a proposal to close a loophole that has allowed corporate groups to exploit mismatches between national tax rules to avoid paying taxes on certain types of profits (“hybrid loans”) distributed within the group. The proposed amendment to the EU's parent-subsidiary directive (2011/96/EU) would prevent double non-taxation by providing that the member state of the parent company will only refrain from taxing profits from the subsidiary to the extent that such profits are not deductible by the latter. The Council called on national experts to examine the dossier further and to clarify the text as necessary following comments from ministers at the meeting. The presidency's intention is to seek adoption of the amending directive at the Council's meeting on 20 June.

The Council also discussed the introduction of a FTT in 11 member states through the “enhanced cooperation” procedure. The presidency took note of a joint statement by ministers of 10 participating countries and confirmed that all relevant issues will continue to be examined by national experts. It noted the intention of participating countries to work on a progressive implementation of the FTT, focusing initially on the taxation of shares and some derivatives. The first steps would be implemented at the latest on 1 January 2016.