International Tax
World Tax Advisor
11 January 2013
In this issue:
Hong Kong court disallows deduction for manufacturing assets used in China ..................................................................... 1 Ecuador: Tax burden on financial institutions increased ........................................................................................................ 3 India: New Companies Act passed ........................................................................................................................................ 4 Luxembourg: 2013 tax measures for companies ................................................................................................................... 4 Peru: Clarifications issued on new tax rules and beneficial tax regimes extended................................................................... 5 United States: Fiscal cliff agreement becomes law ................................................................................................................ 6 Vietnam: Tax and legal changes affecting enterprises in 2013 .............................................................................................. 7 2013 Rate Changes .............................................................................................................................................................. 8 In brief ................................................................................................................................................................................. 9 Are You Getting Your Global Tax Alerts? ............................................................................................................................ 10 Hong Kong court disallows deduction for manufacturing assets used in China
Hong Kong’s Court of Appeal handed down its decision in the Braitrim (Far East) Limited (BFE) case on 6 December 2012,
upholding the disallowance of a deduction for the cost of certain fixed assets used by a Hong Kong taxpayer in its
manufacturing operations in China. The decision is a significant blow to Hong Kong’s manufacturing industry after
numerous unsuccessful appeals to the government on the unfairness of the relevant legislation.
Background
The manufacturing industry has played a vital role in Hong Kong’s success since the 1960s. In the 1960s, most factories of
Hong Kong manufacturers were located in Hong Kong, providing ample employment opportunities for the Hong Kong
workforce. With the increase in Hong Kong property prices, rents and labor costs, Hong Kong manufacturers gradually
began to move their factories to Mainland China. With the Hong Kong side supplying machines, equipment and
supervision, and the China side supplying the land and workforce, manufacturers entered into contract processing (toll
manufacturing) arrangements under which the materials and finished products belonged to the Hong Kong entity. Under
this type of arrangement, the Mainland factory typically is operated by a local Chinese individual/entity in order to comply
with Mainland regulations and the factory charges the Hong Kong entity a processing fee. The Hong Kong Inland Revenue
Department (IRD) generally taxes the profits of the Hong Kong entity on a 50:50 basis (i.e. half of the profits are regarded
as sourced offshore and, therefore, nontaxable and half are subject to Hong Kong profits tax) on the grounds that the
selling operations take place in Hong Kong and the manufacturing operations in China. On this basis, the manufacturing
equipment provided by the Hong Kong entity for use by the Mainland China entity qualifies for half of the depreciation
allowances, which would otherwise not be available.
Over time, the Mainland government began to encourage Hong Kong manufacturers to set up wholly foreign owned
enterprises (WFOEs) on a formal basis to take over the Mainland factories. At the same time, contract processing (toll
manufacturing) arrangements were being replaced by import processing (contract manufacturing) arrangements. The latter
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11 January 2013
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type of arrangement is similar to a contract processing arrangement, except that the ownership of the raw materials and
finished products no longer lies with the Hong Kong entity, but with the Chinese entity (usually a WFOE of the Hong Kong
entity). The Hong Kong entity usually sells the raw materials to the Chinese entity for processing and the finished products
are sold to the Hong Kong entity after processing. The Chinese entity does not charge the Hong Kong entity a processing
fee, the Chinese entity’s reward for its involvement in the arrangement instead being represented by the manufacturing
margin. The IRD has taken the position that the profits made by the Hong Kong entity in these circumstances are no longer
in the nature of “manufacturing profits,” but instead in the nature of “trading profits” wholly subject to Hong Kong tax,
since the Chinese entity – a separate entity – has taken over the “manufacturing operations.” In the two cases regarding the
nature and source of such profits where taxpayers have appealed to the court (CIR v Datatronic Limited and CIR v C G
Lighting Limited), the court has ruled in favor of the IRD.
Since the profits in these circumstances are treated as wholly subject to Hong Kong tax, an issue that has arisen is whether
the machinery or equipment provided by the Hong Kong entity to the Chinese entity is eligible for depreciation allowances
or a cost deduction, as discussed below.
To promote manufacturing industries (as well as information technology industries), in 1998, the Hong Kong government
enacted section 16G of the Inland Revenue Ordinance (IRO) to allow an upfront tax deduction for capital expenditure
incurred on “prescribed assets,” including certain manufacturing and computer equipment. On the other hand, back in
1992, section 39E of the IRO was enacted primarily to counter tax avoidance schemes involving leveraged leases of assets
(including aircrafts and ships) used principally outside Hong Kong. Although section 39E was not intended to target
manufacturing industries, in the mid-2000s, the IRD began to deny depreciation allowances on manufacturing assets
provided by Hong Kong entities to Mainland entities in the context of contract manufacturing operations. To announce this
change, the IRD, in January 2006, also revised its Departmental Interpretation and Practice Note No. 15 by adding a number
of paragraphs explaining that depreciation allowances for assets wholly or principally used outside Hong Kong must be
denied under section 39E of the IRO and sections 16G and 39E operate to disallow the deduction of the cost of prescribed
fixed assets (section 16G) and depreciation allowances (section 39E) where there is a “lease” (for section 39E to apply, the
asset has to be used wholly or principally outside Hong Kong). As the first case on this issue to have reached the court, BFE
is certain to attract the attention of a large number of taxpayers.
Facts
The taxpayer, BFE, was incorporated in Hong Kong in 1998. BFE carried on the business of supplying plastic garment
hangers and related packaging materials until it ceased business in 2002. The hangers were manufactured by two Mainland
companies unrelated to BFE, using moulds provided by BFE, under the guidance of BFE’s staff seconded to Mainland China.
The ownership of the moulds remained with BFE. The moulds were used to manufacture hangers to be sold to BFE. BFE’s
profits for the years of assessment 2000/01 to 2002/03 were treated as fully taxable in Hong Kong. In calculating its
assessable profits, BFE claimed a full tax deduction for the cost of “prescribed fixed assets” under section 16G with respect
to the cost of the moulds in the amounts of HKD 11 million, HKD 3 million and HKD 4 million for the years of assessment
2000/01, 2001/02 and 2002/03, respectively. The IRD challenged the deductions on the grounds that the assets did not
qualify as “prescribed fixed assets” within the meaning of section 16G of the IRO. Under the section 16G definition, certain
assets known as “excluded fixed assets” are outside the scope of prescribed fixed assets. Excluded fixed asset means “a
fixed asset in which any person holds rights as a lessee under a lease.”
The issue in question involves the interpretation of the meaning of the term “lease” and whether it should follow the
“statutory definition” under section 2 of the IRO. The “statutory definition” is widely drawn:
“in relation to any machinery or plant, includes(a) any arrangement under which a right to use the machinery or plant is granted by the owner of the machinery
or plant to another person; and
(b) any arrangement under which a right to use the machinery or plant, being a right derived directly or indirectly
from a right referred to in paragraph (a), is granted by a person to another person,
but does not include a hire-purchase agreement or a conditional sale agreement unless, in the opinion of the
Commissioner, the right under the agreement to purchase or obtain the property in the goods would reasonably
be expected not to be exercised”.
Because of the wide scope of the statutory definition, BFE’s manufacturing assets would fall within the definition of
excluded fixed assets, were the statutory definition to apply.
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In August 2011, the Hong Kong Board of Review (a tax tribunal) held that the statutory definition should apply. Bypassing
the Court of First Instance, the taxpayer appealed to the Court of Appeal, which upheld the opinion of the Board of Review
and ruled against the taxpayer on the basis that the historical circumstances indicated that the statutory definition under
section 2 was intended by the legislature to apply in the context of section 16G, as well as that of section 39E.
Comments
Unless the taxpayer decides to appeal the Court of Appeal’s decision and manages to prevail before the Final Court of
Appeal, it would seem that taxpayer failure at both the administrative level and before the courts has confirmed that no tax
deduction or depreciation allowance is to be granted with respect to manufacturing assets provided by Hong Kong entities
for use by factories outside Hong Kong.
If one looks at the various measures undertaken in other countries to promote local manufacturing industries, it seems
unfortunate that the Hong Kong government should be insufficiently flexible to allow deductions/depreciation allowances
to taxpayers whose profits are treated as wholly taxable in Hong Kong. In light of the significant tax cost that this practice
creates, Hong Kong manufacturers will have to find other ways to evolve, beyond restructuring their businesses, in order to
remain competitive.
—
Davy Yun (Hong Kong)
Partner
Deloitte Hong Kong
dyun@deloitte.com.hk
Finsen Chan (Hong Kong)
Senior Manager
Deloitte Hong Kong
finchan@deloitte.com.hk
Ecuador:
Tax burden on financial institutions increased
A law published in Ecuador’s official gazette on 10 December 2012 introduces changes to the tax regime governing
financial institutions in the country. The rules, which apply as from 1 January 2013 and generally increase the tax burden
and compliance requirements, are as follows:
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Private financial institutions, credit card institutions, savings and loan associations, and similar entities that are
controlled by the Superintendence of Banking and Insurance are no longer entitled to benefit from the 10%
reduction in the corporate tax rate. Instead, as from the 2013 fiscal year, they must pay the normal corporate
income tax rate of 22%.
Financial institutions and credit card companies (but not savings and loan societies) entities must make an advance
payment of the normal income tax in an amount equal to 3% of taxable earnings in the previous tax year. This
percentage may be reduced in certain cases of economic and social hardship by up to 1% of taxable income.
The base of the tax on foreign assets is broadened and the rate increased. The tax base now includes assets held
directly or indirectly by subsidiaries or affiliated companies outside Ecuador, assets located in tax havens or
jurisdictions with preferential tax regimes and investments held overseas in entities regulated by the Stock Market
Inspectorate of the Superintendence of Companies. The rate of the tax on foreign assets is increased from 0.84%
to 0.25% (and to 0.35% when the assets are in tax havens or jurisdictions with preferential tax regimes).
The income tax credit generated on the payment of the Overseas Remittance Tax (ISD, a tax levied on the amount
of any remittance made overseas at a rate of 5% of the amount remitted) and not offset within the five following
tax periods will be reimbursed by the tax authorities through the issuance of a credit note.
Financial institutions are subject to VAT at the standard rate of 12%.
The tax authorities are permitted to obtain information on transactions by financial institutions without the
intercession of the Superintendence of Banking and Insurance. Failure to comply with information requests will
give rise to fines of between 100 and 250 basic unified remuneration (USD 31,800 to USD 70,500 for the 2013
fiscal year) per request made by the tax administration.
Xavier Ribadeneira (Quito)
Partner
Deloitte Ecuador
xribadeneira@deloitte.com
World Tax Advisor
11 January 2013
Pablo Naranjo (Quito)
Manager
Deloitte Ecuador
pnaranjo@deloitte.com
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India:
New Companies Act passed
India’s main house of parliament passed a new Companies Bill on 18 December 2012, which if approved by the upper
house, will replace the current Companies Act dating from 1956.
The bill has several unique features aimed at transparency, corporate governance and protection of minority shareholders. It
also introduces new concepts, such as corporate social responsibility, key managerial personnel, mandatory audits by listed
companies, rotation of auditors, fast track mergers, amalgamation of an Indian company with a foreign company, etc. The
main features of the bill are as follows:
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The consolidation of financial statements would be mandatory.
The mandatory transfer of profits to reserves for dividend declarations would be abolished.
The requirement that central government approval be obtained for related party transactions would be eliminated.
An Indian company could merge with a foreign company.
A fast track merger would be introduced for small companies and holding subsidiaries.
At least one director of a company would have to be a person who has stayed in India for 182 days or more.
Compulsory rotation of audit partners would be required every five years and every 10 years for audit firms in the
case of listed and other specified classes of companies.
The financial year of a company would end on 31 March (although exemptions would be available in certain
cases).
Specified classes of companies with net worth exceeding approximately USD 100 million or turnover exceeding
USD 200 million or profits exceeding USD 1 million would be required to spend 2% of their average net profits of
the previous three years on corporate social responsibility.
The bill is likely to be taken up for approval by the upper house early 2013.
—
Rajesh Gandhi (Mumbai)
Director
Deloitte Haskins & Sells
rajegandhi@deloitte.com
Mehul Modi (Mumbai)
Director
Deloitte Touche Tohmatsu India Private Limited
mmodi@deloitte.com
Luxembourg:
2013 tax measures for companies
After revised forecasts and intensive discussions about how to generate additional tax revenue without discouraging
investment, the Luxembourg parliament has approved new tax measures that demonstrate the commitment to ensure that
Luxembourg remains an attractive destination for international business. The following measures apply as from 1 January
2013:
Corporate income tax rate – The corporate income tax rate is unchanged, but the employment fund surcharge (levied on
the final income tax due by companies) increases from 5% to 7%, which increases the effective income tax rate from
28.80% to 29.22% for companies located in Luxembourg City.
Minimum income tax – A minimum flat income tax of EUR 1,500 was introduced in 2011 to apply to unregulated
collective entities where the total of the entity’s financial assets, transferable securities and cash amounts to more than 90%
of the entity’s balance sheet. In the case of tax consolidation, the minimum tax applied only at the level of the head of the
consolidated group. The minimum tax rules are revised as from fiscal year 2013.
Now, all collective entities having their statutory seat or central administration in Luxembourg (“Luxembourg collective
entities”) are liable to the minimum income tax, regardless of whether they are regulated (Luxembourg permanent
establishments of foreign companies are outside the scope of the minimum tax since, in principle, foreign companies have
their statutory seat or central administration outside Luxembourg.)
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The amount of minimum tax due by Luxembourg collective entities will depend on the activity of the entity. For this
purpose, Luxembourg collective entities are divided into two categories:
1. Luxembourg collective entities holding mainly financial items for more than 90% of their balance sheets will be
liable to a minimum income tax of EUR 3,210 (including the employment fund surcharge). The eligible financial
items are unchanged from the old regime, except for the insertion of amounts owed by affiliated undertakings and
companies with a participating interest, as well as interests held in tax transparent partnerships (independently of
the accounting treatment).
2. Luxembourg collective entities, other than those that hold mainly financial items (broadly, operating companies),
will be subject to a progressive minimum income tax depending on the total assets on their balance sheets. The
minimum tax will range from EUR 535 (for a total balance sheet up to EUR 350,000) to EUR 21,400 (for a total
balance sheet exceeding EUR 20 million), including the employment fund surcharge. The Luxembourg tax
authorities have clarified that the accounting value of assets producing income that is only taxable in another state
under a tax treaty will be excluded from the calculation of the total of the balance sheet (e.g. real estate located
abroad).
For tax-consolidated Luxembourg collective entities, all entities in the group will be subject to the minimum income tax
(payable by the parent entity). However, the aggregate amount due by a tax consolidated group will be limited to EUR
21,400 (including the employment fund surcharge).
The minimum income tax will be viewed as an advance payment of corporate income tax. In practice, the tax will be due
when Luxembourg collective entities are in a tax loss position or paying less than the minimum income tax. In such cases,
the amount paid will be creditable against future corporate income tax without time limit. The minimum income tax cannot
be reduced by tax credits (such as for investments, recruitment of unemployment persons, etc.), and the tax will not be
reimbursed by the Luxembourg tax authorities.
Net wealth tax – A net worth tax of 0.5% is levied annually on the total net assets of Luxembourg companies. This tax may
be reduced in whole or in part if the company creates and maintains for five years a specific reserve amounting to five times
the amount of net worth tax reduced. The reduction is one-fifth of the reserve and may not exceed the amount of
corporate income tax increased by the contribution to the unemployment fund before the imputation of tax credits. Under
the 2013 rules, the minimum income tax will not be taken into account for the net wealth tax reduction.
Tax credit for additional investments – The tax credit rate for additional investments is reduced from 13% to 12% and the
tax credit rate on global investments remains at 7% for the first EUR 150,000, but decreases from 3% to 2% for the tranche
exceeding EUR 150,000.
—
Raymond Krawczykowski (Luxembourg City)
Partner
Deloitte Luxembourg
rkrawczykowski@deloitte.lu
Peru:
Clarifications issued on new tax rules and beneficial tax regimes extended
The Peruvian government has issued a decree (Supreme Decree 258-2012-EF) that clarifies various aspects of the income tax
rules introduced in July 2012, as well as a law (Law 29966) that extends certain tax benefits. The decree and the law were
published in the official gazette on 18 December 2012.
Supreme Decree 258-2012-EF follows the enactment of the July tax reform package, which generally applies as from 1
January 2013 (along with associated regulations). The decree provides as follows:

A chapter is added to the income tax regulations to clarify the application of the new controlled foreign company
rules to the passive income of certain nonresident entities that are owned by Peruvian-resident taxpayers.
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Definitions are provided for certain terms to clarify the scope of the market value rules applicable to the alienation
of shares or other securities, such as what would be deemed to constitute “value agreed by the parties,”
“exchange valuation” and “equity value.”
A jurisdiction will no longer be treated as a tax haven if it signs a tax treaty with Peru that includes an exchange of
information provision. The tax haven characterization will be removed as from the date the relevant treaty enters
into force.
Additional guidelines are provided regarding the scope of the transfer pricing provisions, the types of adjustments,
parameters of the comparability analysis and the advance price agreement procedure.
Law 29966 extends for three years certain tax benefits applicable to strategic economic activities that were due to expire on
31 December 2012. The beneficial tax regimes affected are as follows:
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Refund of VAT levied on acquisitions of goods and services financed by certified foreign donors, including
governments or nonprofit organizations;
Elimination of extra costs associated with public infrastructure works and public services implemented through
public or private investment;
VAT refund regime for mining companies during the exploration stage; and
VAT refund regime for hydrocarbon companies during the exploration stage.
The extension of the beneficial treatment will have a positive impact on the mining and oil and gas sector. Peru is the
world’s second largest copper and silver producer and a major producer of gold, zinc, lead and other minerals. The country
also has the potential to be a significant producer of both natural gas and petroleum due to its unexploited reserves. In
practice, both sectors of the economy experience long-term pre-operating stages and, therefore, the VAT associated with
acquisitions can result in significant financial costs for investors. As a result, the extension of the VAT refund should help to
increase raise investment in these sectors and improve the competitiveness of Peru.
—
Gustavo Lopez-Ameri (Lima)
Partner
Deloitte Peru
glopezameri@deloitte.com
Ana Luz Bandini (New York)
Senior Manager
Deloitte Tax LLP
anbandini@deloitte.com
United States:
Fiscal cliff agreement becomes law
US President Obama on 2 January 2013 signed legislation that averts the “fiscal cliff” by permanently extending the reduced
Bush-era income tax rates for lower- and middle-income taxpayers; allowing the top rates on earned income, investment
income, and estates and gifts to increase from their 2012 levels for more affluent taxpayers; and permanently “patching”
the individual alternative minimum tax (AMT). The American Taxpayer Relief Act of 2012 also extends dozens of temporary
business and individual tax “extenders” provisions through 2013 and includes a number of changes to federal spending
programs.
Among its major tax provisions, the new law:
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Permanently extends most of the individual income tax relief provided in the Economic Growth and Tax Relief
Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 for unmarried taxpayers
with income of USD 400,000 or less and married taxpayers with income of USD 450,000 or less;
Permanently sets the top marginal tax rate at 39.6% (up from 35% in 2012) for unmarried taxpayers with income
over USD 400,000 and married taxpayers with income over USD 450,000;
Permanently sets the top rate on income from capital gains and qualified dividends at 20% (up from 15% in 2012)
for unmarried taxpayers with income over USD 400,000 and married taxpayers with income over USD 450,000;
Increases the individual AMT exemption to USD 50,600 for unmarried filers and USD 78,750 for married filers for
2012, permanently indexes those exemption amounts for inflation beginning in 2013, and allows nonrefundable
personal credits against the AMT;
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Permanently reinstates the personal exemption phase-out (PEP) and limitation on itemized deductions (Pease) for
single taxpayers with adjusted gross income (AGI) above USD 250,000 and joint filers with AGI over USD 300,000,
with the thresholds indexed annually for inflation;
Permanently sets the top estate tax rate at 40% for estates worth more than USD 5 million (indexed for inflation);
and
Renews through 2013 an array of temporary tax “extenders” provisions, such as the research and experimentation
credit, the subpart F active financing exception and the look-through rule for payments between related controlled
foreign corporations.
The new law does not extend the reduction in payroll taxes that was in effect in 2011 and 2012, nor does it reduce or delay
new tax increases on earned and unearned income that were enacted under the Patient Protection and Affordable Care Act
of 2010 and that took effect on 1 January 2013.
—
Jeff Kummer (Washington, DC)
Director
Deloitte Tax LLP
jkummer@deloitte.com
Michael DeHoff (Washington, DC)
Manager
Deloitte Tax LLP
mdefhoff@deloitte.com
Vietnam:
Tax and legal changes affecting enterprises in 2013
During 2012, Vietnam’s Ministry of Finance and other authorities issued regulations, rulings and policies that will impact
business operations in the country. The key initiatives that become effective in 2013 are as follows:
Transfer pricing – Transfer pricing will continue to be one of the main areas of focus of the tax authorities. The General
Department of Taxation and provincial tax departments have established specialist transfer pricing teams and have
organized various trainings to improve techniques and competencies for tax officials for transfer pricing audit purposes. The
tax authorities are continuing to build their own taxpayer database to serve as a benchmarking tool and as a critical base for
assessment of transfer pricing transactions.
The amended Law on Tax Administration, which will apply as from 1 July 2013, introduces an advance pricing agreement
procedure for transfer pricing purposes to facilitate the tax administration process and enable enterprises (mainly foreigninvested businesses) to be more proactive in business planning and in complying with the tax regulations.
Increase in tax penalties – Higher tax penalties will apply as from 1 July 2013 under the amended Law on Tax
Administration. For example, the penalty for late payment of tax will be levied at progressive rates of 0.05% per day for late
payment up to 90 days and 0.07% per day for late payment after 90 days (the penalty currently is a flat rate of 0.05% per
day). The penalty on under-declared tax amounts will double from the 10% to 20%.
New Labor Code – A new Labor Code that applies as from 1 May 2013 provides more beneficial rules for employees
generally and further restricts the employment of foreigners with a view to giving priority to the employment of local
employees. To this end, a work permit will be granted for only two years (rather than three) and the work permit exemption
for foreign employees who work in Vietnam for less than three months will be abolished.
Upcoming legislation/guidance – Various draft laws and regulations are expected to be approved in 2013. Changes to the
Law on Corporate Income Tax that are proposed to come into effect in 2014 include: a reduction in the corporate income
tax rate from 25% to 23%; an increase in the tax deductibility cap for advertising and promotion expenses from 10% to
15%; the reintroduction of corporate income tax incentives for business expansion in certain areas; and the introduction of
thin capitalization rules by capping the maximum deductible loan interest expenses.
—
Tom McClelland (Ho Chi Minh City)
Partner
Deloitte Vietnam
tmcclelland@deloitte.com
World Tax Advisor
11 January 2013
Tuan Bui (Hanoi)
Partner
Deloitte Vietnam
tbui@deloitte.com
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European Union – Two new VAT rules apply in the EU as from 1 January 2013: (1) electronic invoicing will have to be
treated the same as paper invoicing; and (2) EU member states will be allowed to offer a cash accounting option to small
businesses with a turnover less than EUR 2 million a year (the threshold for application of the latter option may vary across
the member states).
Portugal – The thin capitalization rules are abolished as from 1 January 2013 and replaced with specific limitations on the
tax deductibility of interest expense. Under the new rules, net financial costs are deductible only up to the greater of the
following thresholds: EUR 3 million or 30% of the EBITDA. A transition period applies, whereby the deductibility thresholds
will be as follows: 70% (2013), 60% (2014), 50% (2015), 40% (2016) and 30% (as from 2017) of EBITDA. The amount
exceeding the threshold in a given year may be carried forward to the following five years up to the 30% threshold.
Vietnam – The Ministry of Finance issued an official letter on 11 December 2012 instructing the provincial tax departments
on the VAT treatment of loan interest income of noncredit institutions. According to the guidance, the provision of credit
and other financial services that comply with relevant regulations are non-taxable objects under the VAT law, with the
effect that loan interest derived by noncredit institutions from lending activities that are not prohibited by law is not subject
to VAT. However, the official letter does not address the VAT treatment for situations where VAT has already been declared
for loan interest derived before the issuance date of the guidance.
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Australia
Government update on status of Investment Manager Regime
On 21 December 2012, the Australian government made a further announcement on the Investment Manager Regime
(IMR), which reinforces the government’s commitment to the IMR, and the broader goal of promoting Australia as a
regional financial services center. [Issued: 21 December 2012]
URL: http://www.deloitte.com/view/en_GX/global/services/tax/cross-border-tax/international-tax/233cc63f72bcb310VgnVCM1000003256f70aRCRD.htm
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Brazil
Brazil Amends Transfer Pricing Rules on Financial Transactions
On 28 December 2012, the Brazilian government published new transfer pricing rules on financial transactions.
[Issued: 7 January 2013]
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Denmark
Parliament passes dividend anti-avoidance rules and exemption for capital gains on portfolio shares
The Danish Parliament passed two bills on 14 December 2012, one of which contains measures to prevent the
circumvention of Danish and foreign taxation and the other grants a tax exemption for capital gains derived by companies
from the sale, etc. of unlisted portfolio shares. [Issued: 14 December 2012]
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France
FTA comments on anti-abuse provisions relating to acquisition of participating shares
The French tax authorities have made official comments on the anti-abuse rule in the French Tax Code that limits the
deduction of financial expenses linked to the acquisition of participating shares. [Issued: 14 December 2012]
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11 January 2013
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