haku: @journal_id 523 / yhteensä: 381
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| Tekijä: | Portner, R. |
| Otsikko: | Thin capitalization and tax treaties: Unlimited right to tax dividends and interest at source ? |
| Lehti: | European Taxation
1996 : AUG, VOL. 36:8, p. 267-269 |
| Asiasana: | CAPITAL GERMANY OECD |
| Kieli: | eng |
| Tiivistelmä: | In Germany, since 1 January 1994, there has been in effect a law regulating the limitation of tax deductibility of interest on shareholders' loans (thin capitalization). The thin capitalization rule is set out in Section 8a of the German Corporate Income Tax Act. The rule was viewed as necessary to prevent foreign shareholders from financing German subsidiaries with debt instead of equity, thus enabling them to reduce their German tax burden. The new rule provides that fixed rate interest paid on a loan by, or on behalf of, a foreign shareholder holding a substantial participation, is characterized as a hidden distribution of profits. Thus, the interest paid is a non-deductible expense provided some specified conditions prevail. |
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