4 - International tax aspects of the Societas Europaea

Summary

Introduction

1. In contrast to the proposals of 1970 and 1975 and to a certain extent those of 1989 and 1991, the Regulation does not contain special tax provisions for the SE. Recital 20 of the Regulation expressly states that it ‘does not cover other areas of law such as taxation’. Therefore, the provisions of national law and Community law shall apply to areas not covered by the Regulation.

The Regulation differs from Council Regulation No. 2137/85 on the European economic interest grouping (EEIG). in that it does not contain tax provisions. The EEIG was the first legal entity introduced under Community law, and the EEIG Regulation provides for transparency for tax purposes for profits generated by an EEIG.

The absence of specific tax provisions in the Regulation has been criticised by both legal commentators and the European Commission. In a communication to the Council, the European Parliament and the Economic and Social Committee of October 2001 (the October 2001 Commission Communication), the Commission stated as follows in relation to the introduction of the SE:

By that date, the current and future body of EU company law, such as the Parent-Subsidiary Directive and the Merger Directive, must be amended to allow companies to choose this new legal form. However, this might not be sufficient to make the Statute an attractive company law vehicle. The full benefits of establishing a European company (SE) will only be achieved if existing companies can form such an entity without incurring additional tax costs and can avoid some of the existing tax obstacles of operating in more than one Member State. […]