COMTAX

Czech Republic
Case Law Clarifying the Applicability of CUP
The Supreme Administrative Court has recently published a decision, (No. 1 Afs 101/2012-31) clarifying the applicability of the Comparable Uncontrolled Price Method, CUP. The company resident in the Czech Republic sold fish and fish products to both related and unrelated companies. During a tax audit, the authorities challenged the prices in transactions with a related company in Slovakia since the margin, 1.17%, was significantly lower than the margins in transactions with unrelated companies in Hungary, Germany and France. For example, the margin in transactions with the German company was 11.62%. The Slovakian company on the other hand achieved a margin of 59% on resale of the fish.

Thus, the tax authorities applied the internal CUP, i.e. the prices in comparable transactions that the Czech company had carried out with unrelated companies. The Czech company argued that external CUP should be applied, taking into account differing market conditions in Germany and Slovakia that would explain the price differences. However, this view was rejected by the Supreme Administrative Court and thus upward adjustments were made and penalties were levied.

Israel
Budget Proposal 2013-2014
The Minister of Finance submitted the 2013-2014 Budget to the Parliament on 6 May 2013. Among others, the proposed Budget includes an increase of the standard corporate income tax from the current rate of 25% to 26%.

Poland
CFC Regime Proposal
The Ministry of Finance published, on 2 May 2013, the draft Bill of the amendments to the Corporate Income Tax Acts introducing the concept of the controlled foreign company (CFC).

A non-resident company is deemed controlled by the polish resident company if it is located in a listed low-tax jurisdiction.

However, if the non-resident company is located in any other jurisdiction it is considered controlled only once the following control test criteria are met.

• The polish resident company holds, for a period of minimum 30 days, at least 25% of the capital or the voting rights.
• At least 50% of the income in the non-resident company is passive income exempt from tax or subject to tax at a rate at least 25% lower than the corporate income tax rate in Poland.

However, the CFC legislation will not apply to companies within the EU Member States or European Economic Area.

If the Bill is approved and enacted, the amendments will come into force on 1 January 2014.

Ireland
Finance Act 2013 Enacted
The Finance Bill 2013 was enacted on 27 March 2013 as the Finance Act 2013. According to the Act, the rate of capital gains tax is increased to 33%. The new tax rate applies to disposals made after 5 December 2012.

Nicaragua
Law on Transfer Pricing Introduced
Law No. 822, which was published in the Official Gazette on 17 December 2012, introduces transfer pricing provisions in Nicaragua. The law contains inter alia a definition of the concept of 'related party', a list of applicable transfer pricing methods and documentation provisions. The tax authority will have the right to make transfer pricing adjustments and recharacterise transactions between related companies if the prices have resulted in lower taxation or tax deferral. The transfer pricing provisions will be effective from 1 January 2016.

Algeria
Transfer Pricing Documentation Requirements Clarified
According to a decision published in the Official Gazette No. 4 of 20 January 2013, transfer pricing documentation requirements apply to joint stock companies and partnerships with total annual revenue of at least DZD 100 million, all Algerian subsidiaries that are members of a foreign group and companies within a group in which one of the companies has an annual revenue of at least DZD 100 million. Taxpayers failing to meet the documentation requirements will be subject to a penalty of 25% of the restated transferred profits. The documentation requirements apply to transactions carried out from 1 January 2010.

India
Budget 2013-14
On 28 February 2013, the Minister of Finance presented the budget for the fiscal year 2013-14 to the Parliament.

Among others, the budget includes a proposal to increase the surcharge levied on corporate income. The surcharge is currently levied at the rate of 5% on income exceeding INR 10 million. According to the budget, the surcharge will be levied at the rate of 10% on income exceeding INR 100 million. The surcharge levied on foreign companies, currently levied at the rate of 2% on income exceeding INR 10 million, will be increased to 5% on income exceeding INR 100 million.

Further, the surcharge levied on dividend distribution tax will also be increased from the current rate of 5% to 10%.

However, the increase in surcharges will only be in force for one year.

In addition, the withholding tax levied on royalty and fee payments is proposed to be increased from the current rate of 10% to 25%.

Switzerland
Safe Haven Interest Rates 2013
The Federal Tax Administration issued two circulars on 25 February 2013 stating the safe haven rates that apply to loans between related companies.

In case of interest payments from loans in CHF financed through equity and received by related companies, the minimum rate is 1.5%. If the loans are financed through debt, the maximum interest rate is the prime costs plus 0.5% on amounts not exceeding CHF 10 million. On amounts exceeding CHF 10 million, a mark-up on at least 0.25% is required. However, the minimum interest rate in all cases is 1.5%.

The maximum rates for interest payments on real estate loans given by related companies are from 1.5% up to 2.75% depending on the type of loan. In case of interest payments by a Swiss trading or production company on operational loans the rate is at the highest 3.75%. If the paying company is a Swiss holding or administration company the rate is 3.75%.

The minimum rate for interest payments from related companies on loans denominated in foreign currencies are, if financed though equity, 1.75% for the EUR currency and 1.75% for the USD currency. If the loans are financed through debt the interest rate must be at least the prime costs plus a mark-up of 0.5%. However, the minimum rate in all cases is 1.75%.

Congo, Rep of
Corporate Income Tax Amendments
The Government enacted the budget for 2013 on 29 December 2012 and the amendments apply from 1 January 2013. Among others, the corporate income tax rate is reduced by 1 percentage point, from 34% to 33% for taxable profits exceeding F.CFA 1,000. Further, capital gains from shares of resident companies in Congo sold by non-residents are subject to a new tax at a rate of 20%.

In addition, a group taxation regime is introduced for resident companies owning at least 95% in other resident companies. For further information, see the Comtax Systems in the Commentary database for Congo under the subheading Group taxation.

Ivory Coast
Corporate Income Tax Amendments
The Finance Law 2013, published in the Official Gazette on 9 January 2013, is applicable from 1 January 2013. According to the law, the minimum tax of 0.5% is amended and may not be less than F.CFA 3 million, previously 2 million, nor more than F.CFA 35 million, previously 30 million.

United States
List of Boycott Countries Reissued
On 7 February 2013, the US Treasury Department reissued its list of the countries that require cooperation with or participation in an international boycott as a condition of doing business. The countries listed are Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates and the Republic of Yemen.

The new list is unchanged from the list dated 6 November 2012.

The listed countries are identified under US Internal Revenue Code Section 999, which stipulates that US taxpayers who do business with the Government or any corporation or national of these countries are subject to adverse tax consequences under the IRC including the denial of US foreign tax credits for taxes paid to these countries.

Colombia
Tax Reform
The tax reform bill submitted by the Government to the Congress in October 2012 became Law No. 1607 of 2012 and is effective from 1 January 2013. Amongst others, the corporate income tax rate is reduced from the rate of 33% to 25%. In addition, the tax levied on capital gains is reduced from 33% to 10% both for residents and non-residents.

Further, the law introduces a new general anti-avoidance rule were tax authorities may disregard transactions that lack economic substance or business purpose.

Latvia
Transfer Pricing Rules Amendments
The amendments to the transfer pricing documentation provisions in the Taxes and Duties Act is effective from 1 January 2013. According to the provisions, companies with annual turnover exceeding LVL 1 million and transactions with related companies of annual value over LVL 10,000 are required to prepare documentation in line with the OECD Transfer Pricing Guidelines. The documentation must be submitted to the tax authorities within 30 days from request.

Morocco
Budget Law 2013
The budget bill for 2013, presented to the Parliament on 20 October 2012, became Law on 31 December 2012 and applies from 1 January 2013.

Among others, the law increases the withholding tax levied on dividend payments from the rate of 10% to 15%.

In addition, a solidarity contribution tax is introduced for a 3-year period between the years 2013 to 2015. The tax is applicable to companies with an annual net income exceeding MAD 15 million at the following rates:

• 0.5% on income between MAD 15 million and MAD 25 million.
• 1.0% on income exceeding MAD 25 million and up to MAD 50 million.
• 1.5% on income exceeding MAD 50 million and up to MAD 100 million.
• 2.0% on income exceeding MAD 100 million.

Dominican Republic
Corporate Income Tax Amendments
On 9 November 2012, major income tax amendments were introduced through Law 253-12.

Among others, the corporate income tax will be levied at the rate of 29% for taxable year 2013. The tax rate is reduced to 28% for taxable year 2014 and from taxable year 2015 and onwards the tax rate will be further reduced to 27%.

With effect from 10 December 2012, interest payments to non-residents are subject to withholding tax at the rate of 10%. On other payments to non-residents the withholding tax is levied at the rate of 29% for taxable year 2013. For taxable year 2014, the withholding tax rate is reduced to 28% and from taxable year 2015 the tax rate is further reduced to 27%.

Greece
Advance Pricing Agreement Introduced
A draft tax law was submitted by the Greek Ministry of Finance to the parliament on 14 December 2012. The draft includes, inter alia, regulations introducing advance pricing agreements. The law will apply from 1 January 2013.

Malaysia
Thin Capitalisation Rules Postponed
The rules regarding thin capitalisation was scheduled to be implemented by the end of December 2012. However, on 11 December 2012, the Tax Analysis Division of Ministry of Finance issued a statement informing that the implementation of the rules has been deferred to 31 December 2015.

Belgium
Tax Plans For 2013
The tax plans for 2013 were presented to the Parliament on 30 October 2012. Among others, the tax plans proposes a restriction of the notional interest deduction.

Currently, resident companies can make a notional interest deduction based on the share capital and the withhold earnings at the end of the previous year and is calculated by multiplying the share capital by a fixed percentage. If a part of the notional interest deduction is not used one year it is possible carry it forward for 7 years.

According to the tax plans, the carry forward of the unused notional interest deduction will be abolished as of assessment year 2013. Under a transitional regime, the carry forward for unused notional interest deduction available on 31 December 2011 or a taxable period ending in the assessment year 2012 can be carried forward for 7 years. However, if the unused deduction exceeds EUR 1 million, the carry forward will be restricted to 60% for the excess part. In addition, the carry forward period for the unused deduction up to EUR 1 million will be extended.

Brazil
Transfer Pricing Rules in Back-To-Back Transactions
The Federal Revenue Service published Private Ruling 9/2012 in the Official Gazette on 13 November 2012. According to the ruling, transfer pricing rules apply in situations where a Brazilian company purchases goods from a company abroad and immediately sells it to another Brazilian company without importing the goods itself.

This type of transaction can be referred to as a back-to-back transaction; goods are not transferred between a Brazilian company and a foreign related company, instead the two related companies are both located in Brazil. The ruling also clarifies that the profit margin in a back-to-back transaction must be in line with the profit margin that would apply in a transaction between unrelated companies.

Russia
Cyprus Removed From Black List
Foreign dividends are tax exempt in Russia in accordance with the participation exemption. The participation exemption is applicable when the Russian company owns at least 50% of the shares in the distributing company and the subsidiary is not listed on the black list provided by the Ministry of Finance.

Decree No. N 115n issued by the Ministry of Finance on 21 August 2012 and registered by the Ministry of Justice on 25 October 2012, removes Cyprus from the Russian black list of offshore jurisdictions. Consequently, dividends paid by Cypriot companies to Russian companies will be tax exempt once they fulfil the participation exemption conditions.

The Decree will enter into force with effect from 1 January 2013.

Costa Rica
New Income Tax Brackets
The Ministry of Finance amended the income tax brackets for the taxable year 2012-13, i.e. taxable years from 1 October 2012 to 30 September 2013.

Consequently, the corporate income tax rate is levied at the rate of 10% on taxable income up to CRC 47,451,000; previously the bracket was CRC 45,500,000. Further, the tax is levied at the rate of 20% on income between 47,451,001 and 95,447,000; previously CRC 91,600,000. The standard income tax rate of 30% is levied on income exceeding CRC 95,447,000.

Slovenia
Corporate Income Tax Law Amendments
The Government proposed amendments to the corporate income tax law on 27 September 2012.

Currently, losses may be carried forward with no time limit. However, the carry forward of losses from previous tax years is proposed to be limited to 50% of the tax basis.

Ukraine
Advance Pricing Agreements Procedure Introduced
On 22 August 2012, Article 39 of the Tax Code was approved by the Cabinet of Ministers. The ruling introduces a procedure for large tax payers to conclude advance pricing agreements, APAs, with the State Tax Service. The possibility to apply for an APA will be available for taxpayers with revenue of an amount exceeding HRN 500 million or taxes paid of HRN 12 million.

The ruling will be effective from 1 January 2013.

Chile
Tax Reform
On 8 August 2012, the Chamber of Deputies approved a new bill submitted to the Congress by the Government, Bill 8488-05 of 2 August 2012, concerning tax amendments.

The new bill replaced Bill 8269-05 submitted on 3 May 2012. According to the new bill, the rate of the business income tax will be increased to 20% from the current rate of 18.5% for income arising in 2013. Consequently, tax will be levied at the rate of 18.5% for the income arising in 2012. The previous bill proposed a tax increase to 20% for income arising in 2012.

Netherlands
Tax Plan 2013
On 18 September 2012, the Tax Plan for 2013 was presented by the Minister of Finance to the Lower House of Parliament. The plan will be applicable from 1 January 2013 once approved.

Among other proposals, the thin capitalisation rules will be abolished since the regime will become needless due to existing restrictions on interest deduction possibilities and the proposed restriction of interest deductibility for participations.

The proposed restriction of interest deductibility applies to situations where a parent company owns at least 5% of the capital or voting rights in a subsidiary. Further, the restriction applies to interest expenses in excess of EUR 1 million on loans related to participations.

Consequently, there is a safe harbour of loans up to EUR 1 million that falls outside the scope of the rule.

Romania
Tax Code Amendments
Government Ordinance No. 15 amending the Tax Code was published on 29 August 2012. Among others, the rules regarding losses are amended with effect from 1 October 2012. Accordingly, losses of entities ceasing to exist as a result of divisions or mergers are now possible to carry forward up to seven years by the newly formed taxpayer.

Barbados
Budget 2012
The Minister of Finance and Economic Affairs delivered the financial statements and budgetary proposals on 26 June 2012. Once approved, the budget will apply from 1 August 2012.

Effective for tax years 2012 and 2013, the income tax rate for International Business Companies will be reduced. However, only the tax rate applicable to taxable income exceeding 30 millions of BBD will be affected. The tax rate, currently levied at the rate of 1%, will be reduced to 0.5% with effect from 1 August 2012. The tax rate will be further reduced to 0.25% with effect from 1 January 2013.

Ecuador
List of Tax Havens Updated
In Ecuador, domestic companies are subject to tax on their worldwide income. There is a general income tax exemption in respect to income derived abroad and subjected to income tax in the other State. However, the exemption is not applicable to income derived in tax havens.

The General Director of the Internal Revenue Service published an updated list of preferential tax regimes on 30 July 2012 that adds jurisdictions to the previous list that was published in Resolution 2008-182.

Accordingly, Estonia, Bulgaria, Macedonia, Montenegro and Serbia are considered tax havens due to their low corporate income tax rate. Further, the United States is added to the list. However, this only applies to the states of Delaware, Florida, Nevada and Wyoming due to the treatment of limited liability companies that are owned by non-residents and not subject to US federal income tax.

United States
Iraq Added to List of Boycott Countries
On 13 August 2012, the US Treasury Department reissued its list of the countries that require cooperation with or participation in an international boycott as a condition of doing business. The countries listed are Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates, and the Republic of Yemen.

Consequently, Iraq is added to the new list of countries that is otherwise unchanged from the list of February 2012.

The listed countries are identified under US Internal Revenue Code Section 999, which stipulates that US taxpayers who do business with the Government or any corporation or national of these countries are subject to adverse tax consequences under the IRC including the denial of US foreign tax credits for taxes paid to these countries.

The Anti-Avoidance function is now enhanced with a separate Transfer Pricing Overview.

This overview displays all countries' transfer pricing rules in one comprehensive window which enables a quick and effective information search.

The Comtax tools are now upgraded with Transfer Pricing information. The information is found in the Database and in the Commentary section under the Anti-avoidance heading.

It is also covered by the 'Anti-avoidance finder' in the toolbar. The 'Anti-avoidance finder' is the smart chart that gives you an overview of all countries' anti-avoidance rules.

The transfer pricing information covers the following standard headings for each country:

• Arm's length principle,
• Transfer pricing methods,
• Definition of related companies,
• Documentation requirements,
• Business restructuring,
• Interaction between customs valuation and transfer pricing,
• Dispute resolution.

The Anti-Avoidance Finder instantly gives you a quick overview of applicable anti-avoidance rules for each country.

The function was introduced with the latest update and is found under the new toolbar button called Anti-Avoidance.

As of today a new section has been introduced in the Database, called Historical corporate tax rates.

The rates are found both in comprehensive charts for each year and in one chart covering the effective corporate tax rates for all years. In the comprehensive charts you will find all surtaxes and in-depth footnotes that together with the statutory tax rates generate the effective corporate tax rate.

Ratefinder will immensely facilitate your database search and allows you - with a few clicks only - to gain a total overview of one country's tax rates situation in relation to all other countries.

Click to read more

The widely used Comtax Basic 2010 is now online. Thus no installation is needed to immediately reach the tax calculation tool with information for 129 countries/entities. With your login details you can run the program from any computer with internet access.

To learn more about Comtax Basic please view presentation at Comtax Basic 2010 online.

Alongside the previous payments of dividends, interest and royalties we now offer all our users details of management and technical service fees transactions to and from 129 countries

Click to read more

Follow the link below to read about the new Basic version, Comtax Basic 2010.

Products

Information about Bosnia and Herzegovina is inserted in the Database.

As of today a list called Future tax rates is introduced in the Database.

Future tax rates covers the approved future corporate tax rates, and displays the rate, effective date and also comments. This new information will hopefully make e.g. calculations of deferred tax somewhat easier.

The June 2009 update release brings the new version 11.1 of the Comtax System.

Version 11.1 contains improved systematisation that will present more complex and extensive calculations faster.

As of July 1, 2009, technical support and updates will be discontinued for the Comtax System version 10.

The new enhanced successor to version 10 is now available to all users.

For more information see under Products or contact us directly for a personal presentation.

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway

This article was published in INTERTAX Volume 37, Issue 3, page 197-206.

kluwerlawonline.com

Prof. Dr. Wolfgang Kessler, Freiburg i. Br. and Torben Petersen, Stuttgart

This article was published in Internationales Steuerrecht, 22/2007, Seite 815-818. (only available in German)

rsw.beck.de

Jonathan S. Schwarz

This article was published in Taxation Practitioner Tax Planning and Technology Supplement October 1999.

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As with any other business acquisitions, the tax consequences for both purchaser and seller need to be considered in any cross-border acquisition. Given the possibility of double or multiple taxation - or indeed nontaxation - acquisitions in the international context are particularly tax sensitive. Where more than one tax system is involved and the number of combinations arising from different locations of the target company, the purchaser and seller, and indeed any third-party provider of finance, complexity increases exponentially as the various systems interact with each other.

In considering optimum tax structure, the following short and long-term issues require consideration.

Acquisition strategy

This typically involves an examination of the vendor's tax liability on the sale of the company. Secondly, transfer and registration taxes on the acquisition must be evaluated.

Financing the acquisition

Optimising the cost of financing, so that interest and other financing costs can be offset against taxable income, is usually more complex than domestic transactions. Not only are there issues as to ensuring maximum deductibility, but the question arises as to which country these expenses are best incurred.

Operational issues

The acquisition will need to be structured to provide the best overall after-tax return in all countries concerned. This includes possibly stepping up or increasing capital or other depreciation allowances, as well as capital gains for subsequent disposal, the preservation of existing tax benefits, such as losses or allowances of the target business. Income flows, such as royalty and interest payments, as well as distribution of profits, will take into account the impact of withholding taxes and double taxation in the cross-border context.

Ultimate disposal

Long-term planning will consider the possibility of minimising capital gains on ultimate disposal. At the same time, future group reorganisation should not be impeded by inflexible structures.

In the context of a cross-border transaction, the number of tax rules and the permutations and combinations can be daunting; where a number of options are available, analysing them can be time-consuming and costly. Recent developments in IT and communication technology have made it possible for vast amounts of data to be gathered. Tax data on the Internet and on CD-ROM enable detailed information to be gathered from around the world. In most cases, tax planners are limited to searching databases for specific information.

Despite advances in technology, there are few programs that assist in dealing with data once gathered. Even simple tasks -such as sorting tax rates from highest to lowest - are found in only a few programs. Ratefind is an example of a simple program that sorts withholding taxes. Programs that ntelligently apply tax rules in order to assess or predict the outcome of particular transactions or even to assimilate the information in comprehensible form are even rarer. This has remained the role of the planner. The task of converting the rules into mathematical formulae is still left to the individual planner or firm. Arithmetical analysis is of particular importance in international planning, as the number of factors affecting the overall after-tax result is so large. A proprietary system, DTT World Tax Planner, is used in-house by Deloitte & Touche. COMTAX, the international tax planning software which deals with cross-border income flows is, to the writer's knowledge, the only one of its kind on the market. A recently released sister program, GAINTAX, is specifically designed to assist in cross-border mergers and acquisitions.

The GAINTAX system enables models to be developed of cross-border share sales and purchases. It applies tax rules by converting them to arithmetical format. Calculations are made on cross-border gains in order to determine the consequences for the various parties. The program, which combines a database with a spreadsheet, calculates the nominal tax treatment on the disposal of shares in a company located in one country by a corporate vendor located in another country where the target company is located, as well as in the seller's country, and the combined tax result.

The Calculations are based on the assumption that the net gain on the share sale is 100, both in the country of the target company and the seller's jurisdiction. The taxation in both jurisdictions in shown separately and combined order to give an overall picture. Tax rates and amounts after tax are always expressed as a percentage an therefore the calculation will always produce results in percentages, rather than by reference to actual figures. It is implicit that thte transaction is taxable - the program does not deal with tax-deferred transactions such as share-for-share reorganisations.

Transactional taxes, such as stamp duty, are not included in the calculation. However, a database provides details of stamp duty. The program can thus be used in dealing with the acquisition strategy, from the perspective of both purchaser and seller. The seller can obtain an instant model of the consequences of a sale. The purchaser will also have an immediate appreciation of the tax issues facing the vendor. Ion each case, this will take into account the location of the target company, the purchaser and the seller. The system allows for a number of variables which impact on the tax position:

• The tax position of the seller - that is, whether it has other profits or losses, in which case the gain would not be taxable in the seller's country;
• The percentage shareholding by the seller in the target company; and
• The holding period over which the shares have been owned by the seller.

One factor which the first release of gains tax does not address is the distinction between shares in companies whose value is based on immovable property. A number of jurisdictions impose tax on the sale of shares in such circumstances. Within an individual project, it is, however, possible to amend the various tax rates. This enables the user to apply additional information in order to improve the model. It also assists in longer-term planning to test the effect of changes in tax rates, whether they are domestic or treaty rates on potential ownership structures.

Planning tax-efficient cross-border financing for the acquisition can also be modelled using the sister program, COMTAX. COMTAX will calculate the effect of cross-border interest payments, either within a corporate group or to a lending financial institution. Again, the project database can be amended to take into account factors such as the spread chargeable in a jurisdiction in order to comply with arm's length pricing requirements.

Operational cash-flow including royalties, as well as repatriation of profits, can be tested using the COMTAX system. Account can be taken of the tax position of various companies within the multinational group, limits on deductibility for transfer pricing reasons and changes in tax rates, or indeed changer from one method of eliminating double taxation to another. These operational issues are important in deciding which country is most attractive for establishment of an acquisition vehicle.

The other critical tax factor in determining the location of an acquisition vehicle is in relation to ultimate disposal of the target company. By simulating a future disposal by the acquisition vehicle, the most appropriate location can be chosen by correlation the results of models developed in relation to operational aspects with models testing the capital gains issues on ultimate disposal. Both programs provide 'optimisation' functions, which suggest alternatives in descending order of tax efficiency.

Is there a role left for the human international tax planner? Emphatically yes. The system does not answer every question. Structures developed still need to be examined by local counsel in each jurisdiction. Treaties need to be checked for their precise application in the specific circumstances. In my experience, the best use of programs such as COMTAX and GAINTAX is in generating ideas early on in the planning stage, testing revisions and debugging the final structure. The ability to model the tax problems of the other side in any joint ventures as it is with acquisitions. Going into negotiations well-armed with information on possible scenarios for the other parties is often invaluable in bringing the parties together quickly.

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway

This article Shareholder Debt Financing and Double Taxation in the OECD: An Empirical Survey with Recommendations for the Further Development of the OECD Model and International Tax Planning was published in Intertax (2010) Volume 38 Issue 2 pp. 62-92.

kluwerlawonline.com

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway

This article Taxation of Capital Gains in the European Union, Norway, and Switzerland: An Empirical Survey with Recommendations for EU Harmonization and International Tax Planning was published in Intertax (2009) Volume 37 Issue 6/7 pp. 382-405.

kluwerlawonline.com

Prof. Dr. Rainer Zielke, Østfold University College, Halden, Norway

This article was published in INTERTAX Volume 37, Issue 3, pp. 197-206.

kluwerlawonline.com

Prof. Dr. Rainer Zielke, Halden, Norway

This article, Internationale Steuerplanung mit Gesellschafter-Fremdfinanzierung in der Europäischen Union, Norwegen und der Schweiz, was published in Steuer und Wirtschaft (StuW), 1/2009 (only available in German).

shop.otto.schmidt.de

Prof. Dr. Rainer Zielke, Diplom-Finanzwirt/Diplom-Kaufmann, Halden, Norway

This arcticle was published in Internationale Wirtschafts-Briefe (IWB), Heft 10 on 28.05.2008 (only available in German).

www2.nwb.de

Prof. Dr. Rainer Zielke, Diplom-Finanzwirt/Diplom-Kaufmann, Bremen

This article was published in Der Betrieb 21.12.2007, Heft 51/52, Seite 2781-2791. (only available in German)

der-betrieb.de

Prof. Dr. Wolfgang Kessler, Freiburg i. Br. and Torben Petersen, Stuttgart

This article was published in Internationales Steuerrecht, 22/2007, Seite 815-818. (only available in German)

rsw.beck.de

Prof. Dr. Rainer Zielke, Diplom-Finanzwirt/Diplom-Kaufmann, Bremen

This article was published in Der Betrieb, 48/2006, pages 2585-2640. (only available in German)

der-betrieb.de

Prof. Dr. Rainer Zielke, Diplom-Finanzwirt/Diplom-Kaufmann, Bremen

This article was published in Recht der Internationalen Wirtschaft (RIW) 8/2006, pages 600-610. (only available in German)

ASSOCIATED FILES:
Zielke_ThinCapEU.pdf (350112 kb)

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With this study Zielke proves, that the tax differential of 28.8 percentage points within the European Union (EU) represents a considerable incentive to cross border thin capitalization and that the prevailing conceptions to regulate thin capitalization in the EU are empirically evident not suitable to achieve tax revenue effects, since the bilaterally hardly coordinated treatment of requalified interests in thin capitalization cases leads to legal uncertainty and to potential double taxation in 198 of 600 treaty cases in the EU.

Dr Zielke not only points out that this potential double taxation offends against sec. 293 EU treaty, but suggests the following solutions: 1. harmonization of (corporate) income taxes in the EU in combination with the abolition of thin capitalization regulations in the EU; 2. alternatively harmonization of thin capitalization regulations that ensure a cross border concatenation of qualifications on OECD level or EU level, i. e. as part of a EU Model convention.

The study is based on Comtax tax assessment simulations. With Comtax the tax burden of cross border thin capitalisations may be simulated and analysed, that are accepted by both, one or none of the concerned countries.

Wiersholm, Mellbye & Bech, Oslo, Norway

www.wiersholm.no

Tuesday 23 November 2004 the EFTA-court delivered its judgement in the Fokus Bank-case (E-1/04). The Court agreed with Fokus Bank that discriminative dividend tax rules - the denial of an imputation credit to non resident shareholders - are contrary to the rules on the free movement of capital, set out in EEA art 40. The Court also agreed with Fokus Bank that discriminative procedural rules are contrary to the EEA-agreement.

ASSOCIATED FILES:
tax_od.pdf (98694 kb)

Anette Karlqvist, LL.M. and Henrik Spirén, LL.M., Comtax AB, Helsingborg, Sweden

Thin capitalisation legislation is a highly debated topic. The debate started with the judgement from the European Court of Justice (ECJ) in the Lankhorst Case. The main issue in this judgement is that the ECJ found the thin capitalisation legislation in Germany to be in breach with the freedom of establishment rules in the EC Treaty. The reason behind the discrimination was that the German legislation in fact only was applicable when the lending company was a non-resident company.

In this article thin capitalisation legislation is discussed and analysed in the light of the ECJ's judgement. Starting point is three different ways to amend existing legislation to be in accordance with the judgement. The different solutions are found in three countries, Germany, Spain and the United Kingdom.

ASSOCIATED FILES:
IURnr8-04Article.pdf (170 kb)

Dr. Robert Schneider, SchneideR'S Rechtsenwalts - KEG, Austria

In May 2004, the Austrian Parliament enacted the Tax Reform Act 2005, which will come into force as of 1 January 2005. As the second state of the tax reform announced by the governing coalition last year, the Act will have a significant impact, not only on the taxation of Austrian resident individuals, but also - and predominantly - on corporations. The corporate income tax rate will be reduced from 34% to 25% and a new group taxation system will be introduced that allows foreign losses to be offset against Austrian profits.

ASSOCIATED FILES:
2005 Tax Reform Act.pdf (92 kb)

John S. Gulbrandsen - Wiersholm, Mellbye & Bech, Oslo, Norway

The Norwegian government delivered a White Paper on a new tax reform to the King in Council on Friday 26 March 2004. The White Paper contains the Government's proposals for new tax rules and builds upon the report of the Skauge Commitee which was published last year (Norwegian Offical Reports 2003:9).

The White Paper describes and discusses, the proposed new tax rules. Once it has been through Parliament, new legislation will be proposed in a tax reform bill. According to the current plan, the bill will be submitted to Parliament in the autumn of 2004 in connection with proposals for the 2005 budget.

This special edition of wiersholm.info is dedicated entirely to the White Paper, and contains a brief description of those proposals that we consider are likely to be most relevant for our clients.

ASSOCIATED FILES:
WiersholmInfo.pdf (5626 kb)