Council Directive 2011/96/EU (recast) establishes a Union framework to prevent double taxation of cross‑border parent‑subsidiary groups. Profit distributions paid by a subsidiary to its parent or to a parent’s permanent establishment are exempt from withholding tax; the Member State of the parent must either exempt such income or permit a deduction corresponding to the corporation tax paid by the subsidiary. Relief applies through chains of subsidiaries, subject to the Directive’s definitions and a minimum 10% holding.

The Directive specifies eligible company forms and taxes, allows Member States to treat subsidiaries as fiscally transparent, and permits domestic or treaty anti‑abuse measures. It repeals Directive 90/435/EEC, entered into force on publication, and required transposition by Member States from 18 January 2012, with notification obligations to the Commission.