BEPS 2.0 and ATAD 3 represent the latest challenge to the tax status of holding companies, renewing focus on issues of substance and withholding taxes, write Gregory Price and Sarah Ling (Macfarlanes).
A brief history
Intermediate holding companies are a common feature of international groups often used to hold shares in subsidiaries organised on a regional or divisional basis. In a private equity context holding companies are often used as the vehicle for investing in portfolio companies rather than holding interests directly through a fund partnership.
Once upon a time it was not particularly controversial that holding companies were entitled to the benefits of tax treaties and (in the case of EU companies) directives in their country of residence. This would often restrict the right of investee jurisdictions to tax dividends and gains derived by the holding company from its local subsidiaries.
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BEPS 2.0 and ATAD 3 represent the latest challenge to the tax status of holding companies, renewing focus on issues of substance and withholding taxes, write Gregory Price and Sarah Ling (Macfarlanes).
A brief history
Intermediate holding companies are a common feature of international groups often used to hold shares in subsidiaries organised on a regional or divisional basis. In a private equity context holding companies are often used as the vehicle for investing in portfolio companies rather than holding interests directly through a fund partnership.
Once upon a time it was not particularly controversial that holding companies were entitled to the benefits of tax treaties and (in the case of EU companies) directives in their country of residence. This would often restrict the right of investee jurisdictions to tax dividends and gains derived by the holding company from its local subsidiaries.
As our...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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