Concept of associated enterprises

The Directive defines the concept of associated enterprises under § 23 of the revised Art. 3 of Directive 2011/16/EU on “Definitions” as follows:

23. for the purposes of Art. 8ab, “associated enterprise” means a person who is related to another person in at least one of the following ways:

1. a person participates in the management of another person by being in a position to exercise a significant influence over the other person;
2. a person participates in the control of another person through a holding that exceeds 25% of the voting rights;
3. a person participates in the capital of another person through a right of ownership that, directly or indirectly, exceeds 25% of the capital;
4. a person is entitled to 25% or more of the profits of another person.

If more than one person participates, as referred to in points (a) to (d), in the management, control, capital or profits of the same person, all persons concerned shall be regarded as associated enterprises.

If the same persons participate, as referred to in points (a) to (d), in the management, control, capital or profits of more than one person, all persons concerned shall be regarded as associated enterprises.

For the purposes of this point, a person who acts together with another person in respect of the voting rights or capital ownership of an entity shall be treated as holding a participation in all of the voting rights or capital ownership of that entity that are held by the other person.

In indirect participations, the fulfilment of requirements under point (c) shall be determined by multiplying the rates of holding through the successive tiers. A person holding more than 50% of the voting rights shall be deemed to hold 100%.

An individual, his or her spouse and his or her lineal ascendants or descendants shall be treated as a single person.

Despite the delimiting wording in Art. 3 point 23 which refers only to Art. 8ab, the European Commission stated that the definition shall be taken to apply to all references in DAC6, i.e. references both in the main body of the Directive and the Annex (hallmarks C.1 and E.2).

For other comments on the concept of associated enterprise as applied to a structure involving a transparent entity, see section VI, under hallmark C.