Skip to main content
European Commission logo
enen
Business, Economy, Euro
Taxation and Customs Union

Merger Directive

An EU Directive to remove fiscal obstacles in cross-border reorganisations

Merger

Directive

The Merger Directive is an EU Directive that regulates the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares. The objective of the Directive is to remove fiscal obstacles to cross-border reorganisations involving companies situated in two or more Member States. 

The Directive also covers transfers of registered offices of a European Company (Societas Europaea, SE) or European Cooperative Society (Societas Cooperativa Europaea, SCE).

Mergers, divisions and partial divisions

During a merger, division or partial division, 

  • capital gains are taxed when such gains are realised and not at the time of the operation 
  • capital from the acquiring company that are transferred to a shareholder of the acquired company must not lead to taxation of that shareholder’s income, profits or capital gains 
  • provisions or reserves partly or wholly exempt from tax may be carried over by the permanent establishments of the receiving company 

Transfers of SE or SCE offices

During the transfer of an SE or SCE’s registered office, 

  • income, profits or capital gains of its shareholders must not be taxed 
  • gains arising out of the subsequent transfer of capital from the SE or SCE may be taxed 
  • provisions or reserves partly or wholly exempt from tax may be carried over by a permanent establishment of the SE or SCE situated in the EU country of the original registered office 

Documents and legal texts

  • Council Directive 2009/133/EC of 19 October 2009 on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different Member States and to the transfer of the registered office of an SE or SCE between Member States 
  • Council Directive 2013/13/EU of 13 May 2013 adapting certain directives in the field of taxation, by reason of the accession of the Republic of Croatia