Tax neutrality in the exercise of the right of establishment within the EU and the funding of companies

Resource Information

The work Tax neutrality in the exercise of the right of establishment within the EU and the funding of companies represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

Tax neutrality in the exercise of the right of establishment within the EU and the funding of companies

Creator

• García Novoa, C

Subject

• fiscal neutrality
• fundamental freedoms
• thin capitalization

Language

eng

Summary

Neutrality with regard to import and export neutralities influences direct taxation of companies. The parent company can compete to finance its subsidiary by means of a loan or by increasing its shareholdings. There is no neutrality in the form of funding of the companies located in countries that contemplate average or high taxation for business profits, because there are expectations of fiscal planning. To avoid these situations, the countries of residence of the subsidiaries of a financial centre or parent company lender protect their tax bases through a classic special anti-tax avoidance measure: thin capitalization. The compatibility of the thin capitalization with the Organisation for Economic Co-operation and Development (OECD) Model calls for a flexible thin capitalization rule, instead of ratios or rigidly predetermined coefficients

Citation source

In: Intertax. - Alphen aan den Rijn. - Vol. 38 (2010),

Geographic coverage

• European Union
• Europe

Language note

English