英国政府 欧州金融取引税について提訴多国籍企業に関係する 2013 年度予算税制措置 < 短信 > <Belgium> Final 2013 budget measures implemented First 2013 budget control measures implemented Seco

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1 Japanese Services Group Japanese Business Taxation Europe Newsletter Bi-Monthly Newsletter for Japanese Multinational Corporations operating in Europe Vol / /10/2013 In this issue ( Jump to English Index ) < ベルギー > 最終 2013 年度予算案の導入第一次 2013 年度予算管理措置の導入第二次 2013 年度予算管理措置の導入 ARGENTA 裁判における欧州司法裁判所の判決パテント所得控除および R&D 要員の給与源泉税の減免に関する改正 < デンマーク > デンマーク政府および野党 法人税率削減に合意 <EU> EU 金融取引税に関わる懸念事項の概要を示すリーク文書を軽視国別報告 : 多国籍企業の新たな課題 < フランス > 仏裁判所 移転価格裁判において匿名比較対象の利用を否認脱税防止措置の詳細の発表金融チャージの損金算入総限度額規定に関する行政ガイドライン仏税務当局 恒久的施設に対する配当追加税の適用につき明確化 < ドイツ > 連結納税グループの損失利用制限の適用範囲の拡大ポートフォリオ配当課税の改正および源泉税還付手続の導入 2013 年度修正税制法案 < ルクセンブルグ > EU 預金利子指令下での自動的情報交換の適用キャピタルゲインに対する退去税課税法案 国会に付託 < スペイン > スペインの退去税コメンタリーを否認する欧州裁判所判決国立国際課税局の設立 < オランダ > 実質的な管理支配地がルクセンブルグに所在する場合の再投資準備金に対する課税についてのルーリング支払利息の損金不算入制度に関する政令資本参加免税の分割法の適用に関する判決支払配当から源泉徴収された租税の免除額が益金に加算されるべきとの最高裁判決 < 英国 >

2 英国政府 欧州金融取引税について提訴多国籍企業に関係する 2013 年度予算税制措置 < 短信 > <Belgium> Final 2013 budget measures implemented First 2013 budget control measures implemented Second 2013 budget control tax measures implemented ECJ issues decision in Argenta case Law changing patent income deduction and withholding tax exemption for researchers <Denmark> Danish government and opposition agree on corporate tax cut <EU> EU downplays leaked document outlining financial transaction tax concerns Country by country reporting: a future challenge for multinationals? <France> French court denies use of secret comparables in transfer pricing case France announces details of anti-avoidance measures against tax fraud Administrative guidelines released on new global cap on financial charges Tax authorities clarify application of dividend surtax to PE s <Germany> Scope of dual consolidated loss rules broadened Germany amends taxation of portfolio dividends and introduces new refund procedure for tax withheld Amended tax act 2013 approved <Luxembourg> Automatic exchange of information under savings directive to apply Luxembourg bill on exit tax provisions on capital gains presented to parliament <Spain> ECJ Rules against Spanish exit tax commentary New tax office created <The Netherlands> Dutch ruling on taxation of reinvestment reserve where effective management is in Luxembourg Netherlands publishes decree on non-deductible interest Dutch ruling on application of partitioning doctrine to participation exemption Dutch supreme court rules that released dividend wht liability must be added to taxable profits for corporate income tax purposes <United Kingdom> UK lodges an application at ECJ against eu financial transactions tax 2013 budget measures affecting multinationals <Short News> ベルギー 最終 2013 年度予算案の導入 2013 年度予算案の実施措置を含む 税制 財政措置に関する 2013 年 6 月 17 日法 がベルギー官報に公告された 本法令には 主に次の税制措置が定められている みなし利息控除 (Notional interest deduction): 償還期間 10 年の国債の利率の最近の推移を考慮し みなし利息控除額の算出のために使用される利率は 課税年度の前々歴年の第三四半期の利率を参照するものとする 新規定は 2014 課税年度から適用され 2014 課税年度のみなし利息控除額の利率は大企業 2.742% 中小企業 3.242% となる 使途不明金税 (Secret commission tax)309%: 会社が行った支払または供与した便宜の受益者が これを自らの課税所得として自発的に申告したことを会社が当局に対して証明可能な場合には 会社がこれらの支払い 供与に対し所定の特別申告フォーム ( 受益者の名前 住所 金額等を記載 ) を当局に提出しなかった場合でも 税務当局の慣習上 ベルギー税務当局はこのような支払または便宜に対し 309% の使途不明金税を課すことはなかった このような行政上の習慣が今回所得税法の規定として明文化される また 受益者が所得として申告をすることにより 使途不明金税の対象とならない費用を 支払い側の会社は法人税上損金算入することができる 新規定

3 は 2014 課税年度より適用される 詳細は英文テキストへ 第一次 2013 年度予算管理措置の導入 2013 年 3 月予算管理合意書に定められる税制措置が 2013 年 6 月 28 日付綱領法により導入された みなし利息控除 (Notional interest deduction): 資本参加免税の対象となる保有株式は みなし利息控除額の計算上除外しなければならない 清算配当 (liquidation bonus) 支払における源泉税の引上 :2014 年 10 月 1 日以降 現在の 10% から 25% に引き上げられる 詳細は英文テキストへ 第二次 2013 年度予算管理措置の導入 2013 年 3 月予算管理合意書に定められる税制措置が 2013 年 7 月 30 日付綱領法により導入された フェアネス タックス : 配当として株主に支払われる所得の内 過年度よりの繰越欠損金または当該年度のみなし利息控除と相殺されることにより非課税となった部分に対してはフェアネス タックスが課せられることとなった ここで言う配当金には 資本金 資本剰余金の払い戻しの内 税務上配当として扱われるものも含まれるものとする ただし 清算配当金に対する源泉税の規定の変更に従い最近導入された移行措置により 10% の源泉税の対象となる配当は フェアネス タックスの対象外とする フェアネス タックスの税率は 5% であるが 3% の付加税が更に課されるため 実効税率は 5.15% となり 2014 課税年度より適用される 2013 年 6 月 28 日以降に事業年度の期末日を変更した場合 濫用防止規定によりフェアネス タックスの適用上はこの変更が行われなかったものとみなされる 現行の弁護士費用に対する VAT 免除の廃止 :2014 年 1 月より適用 詳細は英文テキストへ ARGENTA 裁判における欧州司法裁判所の判決欧州司法裁判所は 2013 年 7 月 4 日 Argenta Spaarbank 裁判における判決 (C-350/11) を下した 現行のみなし利息控除の規定では ベルギー国外に恒久的施設 (PE) に配賦される所得に対するベルギーでの課税を免除されているベルギー法人は 当該恒久的施設に配賦される純資産をみなし利息控除の計算ベースから除外しなければならないとされる 欧州司法裁判所は大司法官の意見に従い このような規定は EU の 設立の自由 原則違反であると判決した 大司法官は 現行の規定においては ベルギー国内に恒久的施設を有する納税者 ( または その所得がベルギーでの課税を免除されない恒久的施設を国外に有する納税者 ) が ベルギーでの課税を免除される恒久的施設を他の EU 加盟国に有する納税者と差別的に取り扱われ かつ このような 設立の自由 の阻害に対する十分な正当な理由が示されていないことを示唆した 欧州裁判所の論旨に従えば その不動産所得がベルギー国の課税を免除される ( 恒久的施設に属さない ) ベルギー国外の不動産をみなし利息控除の計算ベースから除外すると言う現行規定もまた 欧州法違反であるということになろう この判決を受けて ベルギー政府がどのように また どのようなタイミングで現行の規定を改正するかは未定である 詳細は英文テキストへ パテント所得控除および R&D 要員の給与源泉税の減免に関する改正 2013 年 6 月 28 日 一連の税制 財政措置を含む法律がベルギー官報に公告された 本法律は パテント所得控除および R&D 要員の給与源泉税の減免に関する改正につき定めている 2013 年 7 月より R&D 要員の給与源泉税の減免率が 75% から 80% に引き上げられる 2014 課税年度より 会社法 15 条の定義により 中小企業 とみなされる企業は R&D センターにおいて 開発または改良されるという条件を満たさないパテントについても パテント所得控除を認められる 2014 年 1 月以降 R&D 優遇税制を申請する企業は 連邦科学技術政策局 ( Programmatorische Federale Overheidsdienst Wetenschapsbeleid / Service public de programmation de la Politique scientifique fédérale ) に対し 申請対象となる研究開発計画の内容を事前に報告することが義務付けられる 詳細は英文テキストへ

4 デンマーク デンマーク政府および野党 法人税率削減に合意 4 月 24 日 デンマーク政府および各政党は成長計画につき合意した 主な措置としては 2014 年から 2016 年にかけて 法人税率 ( 現行 25%) を最終的に 22% になるよう段階的に削減する 金融セクターに対する給与税の引き上げ 製造に関わるエネルギー税の削減詳細は英文テキストへ EU EU 金融取引税に関わる懸念事項の概要を示すリーク文書を軽視 欧州委員会は 金融取引税 (FTT) の導入に合意した EU11 カ国の懸念事項の概要を示すリーク文書の重要性を否定した 欧州委員会の FTT 提案書によると 全ての証券 債券取引には 0.1% デリバティブ取引に対しては想定元本の 0.01% が課税される 欧州委員会は リーク文書は EU 理事会の作業グループの文書であることを認めたが 当該文書は技術的な討議過程の一部を示すものにすぎないと述べた 2 月に公表された FTT に関する指令草案によれば FTT は 2014 年 1 月 1 日をもって発効することを目標としている 詳細は英文テキストへ 国別報告 : 多国籍企業の新たな課題 2013 年 6 月 12 日 欧州議会は会計指令改正案および透明性指令改正案を正式に採択した 両指令共に 資源採掘産業および原生林の伐採に関わる国別報告 (country by country reporting) についての規定を含んでいる 最近採択された 銀行セクターに対する EU 国別報告義務もまた近く公表される予定である 現在 欧州議会ならびに欧州委員会は 国別報告を全てのセクターの大企業に拡大することを検討している ただしこれらの措置が法制化されるためには 欧州議会と欧州加盟国理事会の合意が必要である 企業は 税務上の開示の強化を要求する一般大衆 メディア 政界からの高まる圧力に直面している 国別報告義務の範囲が 全てのセクターに拡大された暁には 大企業 企業グループは 事業を行う全ての地域について国別の財務情報 ( 損益 租税 ローン 助成金等 ) を従来より更に詳細に開示することを義務付けられる 企業は 投資家 メディア 一般大衆に対するコミュニケーション戦略の見直しを迫られる 例えば 一部の企業は 自発的に国別報告を行うことにより透明性を増し事業上の優位性につなげようとしている 詳細は英文テキストへ フランス 仏裁判所 移転価格裁判において匿名比較対象の利用を否認 2013 年 2 月 5 日 パリ行政控訴院は 仏税法第 57 条の移転価格規定下での匿名の比較対象 (Secret

5 Comparable) の利用につき否認した 独立企業間価格に基づく報酬額の算定において 税務当局は 仏証券取引所に上場している 3 つの主要グループのキャッシュ プーリング取引を比較対象に用いたが 比較対象グループの名称もキャッシュ プーリング契約の条件も納税者に対し開示しなかった パリ行政控訴院は 納税者の取引価格が上述 57 条下での 異常に低い価格 であると断ずるためには 匿名の比較対象を参照することはできないと判示した 詳細は英文テキストへ 脱税防止措置の詳細の発表 2013 年 4 月 10 日 閣僚会議は 脱税防止目的の一連の新措置に関する公式通達を発表した 中でも重要なポイントは 申告義務の強化 脱税に対する刑事罰 脱税および租税回避を防止するための措置の強化 税務調査権限の強化 非協力国 非協力的地域 (NCSTs) のリストアップ 当局間の自動的情報交換についてである 詳細は英文テキストへ 金融チャージの損金算入総限度額規定に関する行政ガイドライン 2013 年度財政法案により 法人の負担する金融チャージの損金算入総限度額に関する規定が導入された この規定により その他の損金算入制限ルールの適用後に残った金融チャージ額の 85%(2014 税務年度より 75%) が 損金算入限度額とされる 損金算入限度額は 金融チャージのネット額 ( 当該税務年度の金融費用から同年度の金融所得を差し引いた額 ) に対して計算される 上記の金融チャージの損金算入制限規定の詳細を解説するガイドラインが長く待たれていたが 仏税務当局がこの度それを発表し 当該規定のスコープおよび算定ルールを明らかにすると共に 当該規定の元になる金額を割り出すためのその他の損金算入制限の適用の順序についても詳述している 詳細は英文テキストへ 仏税務当局 恒久的施設に対する配当追加税の適用につき明確化 2013 年 4 月 10 日 仏税務当局は 仏法人税対象法人 ( 含外国法人のフランス内恒久的施設 ) に適用される配当 みなし配当に対する 3% の追加税に関する新規定を明確化する行政ガイドラインを発表した 本追加税は 2012 年度修正予算案により導入され これにより フランス国内に恒久的施設を有する外国企業もまた 利益が仏恒久的施設により使用可能でなくなる (cease to be at the disposal of a PE ) 時点で 3% の追加税を課税されると言うこととなった 行政ガイドラインは 追加税のベースの算定方法につき追加的な詳細を明らかにし 特に 上述の 恒久的施設により使用可能でなくなる 金額とは 本店により恒久的施設から引き揚げられる資産および仏法人税法により損金不算入とされる一定の費用に基づき算定される 詳細は英文テキストへ ドイツ 連結納税グループの損失利用制限の適用範囲の拡大 ドイツにおける損失二重計上ルールの範囲が拡大され 連結納税グループ内の親会社または子会社のいずれに対しても適用されることとなった 新規定によれば ドイツで同じ連結納税グループに所属する支配企業または被支配企業の損失が ドイツ国外の税制上で その支配企業 被支配企業または他の者により使用することができる場合には 当該損失のドイツにおける損金算入が認められなくなる 旧規定では ドイツ連結納税制度に類似するドイツ国外の税制上で 支配企業が損失を利用した場合にのみ その支配企業による当該損失のドイツにおける損金算入が認められなかった 詳細は英文テキストへ ポートフォリオ配当課税の改正および源泉税還付手続の導入 ドイツ連邦参議院は 2013 年 3 月 1 日 受取配当の 95% 免税における 10% 持株要件 ならびに 他の

6 EU/EEA 加盟国の法人株主による一定の配当源泉税に対する還付申請手続を導入する法案を可決した 本法案は EU 親子会社指令が対象とする資本関係 (EU 法人の 10% 未満の持分および EEA 法人の持分 ) の範囲外の資本関係に関して 現行のドイツ源泉税制度が EU 条約及び EEA 条約の掲げる 資本の移動の自由 の原則に違反するものであると判示した 2011 年の欧州裁判所判決に対応するためのものである 法案の 10% の持株要件は 単独で判定される ( つまり間接持分を同時に考慮することはできない ) またこれは 配当に対してのみ適用される要件であり 株式譲渡益に対しては適用されない ( すなわち 10% 未満の持分を譲渡した場合でも その譲渡益は従来通り 95% 免税となる ) 詳細は英文テキストへ 2013 年度修正税制法案 2013 年度税制改正案は 2012 年から続いていた審議を経て 2013 年 6 月 6 日と 7 日にそれぞれ 連邦議会および連邦参議院においてその修正案が可決された アンチ ハイブリッドファイナンス ルール : 本規定により 受取配当に係る 95% 免税は 損金算入 配当に対して適用されないこととなる 損金算入配当とは 外国法人から受ける配当において そ の配当が現地国で費用になる すなわち 損金算入されるものをいう 本改正は アグレッシブな タックス プランニングへの EU の勧告に対応するため ハイブリッドファイナンスなどの特定のス キームを対象としたものである 新規定は 2012 年 12 月 31 日より後に開始する事業年度にお いて受ける配当に対して適用される 不動産移転税 (RETT): ドイツ国内に不動産を所有する法人の株式または持分のうち 95% 以上が 一の取得者によって直接または間接に取得された場合には 原則として当該不動産に対してドイ ツ不動産移転税 (RETT) が課される この不動産移転税の課税回避スキームとして RETTblocker が利用されることがある RETT-blocker とは ドイツ合資会社 (KG) を設立し これに不動 産所有法人の持分のうち 5.1% 以上を保有させることによって 不動産移転税の課税を回避するス キームである このようなスキームを防止するために 経済的持分 の概念が導入された 新規定 は 2013 年 6 月 6 日より後に行われる取引に対して適用される 詳細は英文テキストへ ルクセンブルグ EU 預金利子指令下での自動的情報交換の適用 2013 年 4 月 10 日 ルクセンブルグ政府は 2015 年以降 EU 預金利子指令下での自動的情報交換制度に移行する旨を発表した この結果 ルクセンブルグは ルクセンブルグに銀行口座を有する他の EU 加盟国の居住者の情報を 他の EU 加盟国当局と交換することになる 2015 年までは 従来通り当該指令に基づく移行的源泉税制度 (EU に居住する個人に対する利息支払いについて 35% の源泉税の適用 ) を継続する 詳細は英文テキストへ キャピタルゲインに対する退去税課税法案 国会に付託 2013 年 2 月 22 日の閣僚会議による可決に続き キャピタルゲインに対する退去税課税法案が国会に付託された キャピタルゲインの課税の繰延 : ルクセンブルグ法人の法律上の所在地および管理の中心が他 の EEA 加盟国に移転し 当該法人が移転された資産の所有権を保持する場合 ルクセンブルグ法人間の資産の簿価での移転制度は廃止 キャピタルゲインの再投資における課税の繰延は 他の EEA 加盟国に所在する恒久的施設に 所属する資産への投資にも拡大される 詳細は英文テキストへ

7 スペイン スペインの退去税コメンタリーを否認する欧州裁判所判決 2013 年 4 月 25 日 欧州司法裁判所は 他の EU 加盟国への退去時に未実現キャピタルゲインに対し即時に退去税を課税すると言うスペインの規定が EU 法違反であると判示した その根拠は スペインの徴税を可能にする EU 内の一連の機構が存在するために 当該スペインの規定が国内税制の一貫性およびバランスのとれた課税権の分布の確保のために必要とされる度合を超えているというものである 欧州裁判所判決の観点から スペイン退去税ルールは スペイン居住法人が他の EU 加盟国に税務上の居住地を移転する時点 および 他の EU 加盟国の恒久的施設が資産を移転する時点に発生するキャピタルゲイン課税の繰延を自動的に認めるメカニズムを含む方向で改正されるべきであろう 本判決により スペイン居住法人の税務上の居住地の移転に結びつく負担が軽減されることになる 過去に退去税を負担した法人は 還付申請を検討する可能性がある 詳細は英文テキストへ 国立国際課税局の設立 2013 年 3 月 13 日付の決定に従い スペイン国税局は新たに国立国際課税局を設立した マドリッドをベースとする特殊部局である国立国際課税局は 異なるレベルの 50 名の所員で構成される スペイン税務当局は この部局を通じて 企業再編における無償での無形資産の移転や 事業体の実態に反するあらゆる取引の摘発を目指す グループ内のサービスの提供 コスト分担契約 利子支払 繰越欠損金の濫用 移転価格文書化義務違反等もこの部局により精査される予定である 詳細は英文テキストへ オランダ 実質的な管理支配地がルクセンブルグに所在する場合の再投資準備金に対する課税についてのルーリング 2013 年 3 月 22 日 オランダ最高裁判所は 実質的な管理支配地が取引時はルクセンブルグであり その後 オランダとなる法人が行ったオランダに所在する不動産の譲渡にかかる再投資準備金 (reinvestment reserve) に対しオランダで課税することが出来るか否かをめぐる裁判において 判決を下した オランダ所得税法第 3.54 条は 譲渡価格が簿価を超える場合 差額を再投資準備金を設定することができるとしている 再投資準備金は 一定要件を満たした場合 譲渡された資産の代替資産の取得の意図がある限り継続して計上可能である 上述の判決において 最高裁判所は 非居住者がオランダにある不動産を所有する場合 当該不動産の譲渡益を再投資準備金に計上することができるが 規定の再投資期限内に再投資が行われない場合には即時に譲渡益が課税の対象となると判示した 本件においては オランダ法に基づいて設立されたものの実質的な管理支配地がオランダからルクセンブルグに移動した法人が対象となっているが 本判例はオランダ国内に事業用資産を有するオランダ税法上の全ての非居住法人に適用されるべきであろう 詳細は英文テキストへ 支払利息の損金不算入制度に関する政令 2013 年 4 月 3 日 法人税法第 10a 条の明確化を目的とする 特定の支払利息の損金不算入に関する 2013 年 3 月 25 日付政令 が公告された 法人税法第 10a 条は 以下の取引にかかる支払利息を損金不算入とするものである 関係会社または関係のある個人に行う利益配当または資本の払戻 関係会社への増資

8 ある法人の株式取得または追加的取得で かつ この取得により当該法人が関係会社になる場 合 本政令は官報公告日 (2013 年 4 月 3 日 ) 以降 2013 年 3 月 25 日に遡及して適用される 詳細は英文テキストへ 資本参加免税の分割法の適用に関する判決 2013 年 6 月 14 日 最高裁判所は 資本参加免税を課税期間と非課税期間に区分する分割法 (Paritionng doctrine) は 法改正による資本参加免税の要件の変化の場合には適用されないと判示した 分割法によれば 要件を満たした期間とそうでない期間に応じ 所得を非課税部分と課税部分とに区分しなければならない 最高裁判所は 資本参加免税の要件が法改正により変化し 経過措置が定められていない場合には そのような改正は通常の法改正と同様即時に施行されると述べた すなわち 所得の認識時点で改正後の要件を満たしてさえいれば 法改正以前の要件は満たしていなくとも その期間は考慮せずに 所得の全額に対して資本参加免税を適用できると言うことを意味する 新規定は 2013 年 6 月 14 日より遡及的に適用される 詳細は英文テキストへ 支払配当から源泉徴収された租税の免除額が益金に加算されるべきとの最高裁判決 2013 年 3 月 8 日 オランダ最高裁判所は 支払配当から源泉徴収された祖税の免除額は法人上の益金に加算すべきであるとの判決を下した 本件において 納税者は 源泉徴収義務者として配当額の支払額から税額を源泉徴収したにもかかわらず 徴税期限の時効により実際には当該源泉税が当局に納付されることはなかった このため 税務当局は納税者の 2006 年度の課税所得に当該源泉税相当額を加算すべきであると主張した 最高裁判所は 納税債務の免除は その他の通常債務の免除と同様に取り扱われるべきであると判示し 納税債務の免除から生ずる資金の増加は益金に加算されるべきであるとの上訴裁判所の判決を追認した 詳細は英文テキストへ 英国 英国政府 欧州金融取引税について提訴 2013 年 4 月 19 日 英国財務相は政府が欧州金融取引税 (FTT) につき欧州司法裁判所に提訴したことを発表した 2012 年 10 月 16 日 英国はすでに他の加盟国と共に FTT を採択する意思はないことを表明している 詳細は英文テキストへ 多国籍企業に関係する 2013 年度予算税制措置 3 月 20 日 英国財務相は 2013 年度予算を発表した この表明においては すでに 2012 年の秋期発表と 2013 年度税制改正案において述べられたもの以外に 法人税率が 2015 年 4 月までに 20% まで引き下げられることが明らかになった この税率引き下げにより 特に日本のタックスヘイブン対策税制 ( 実効税率が 20% 以下となる外国関係会社の所得が日本の親会社の所得に合算され 日本でも課税される ) への影響が考えられる 詳細は英文テキストへ

9 Belgium Final 2013 budget measures implemented The Law containing tax and financial measures dated 17 June 2013, which also contains a number of measures executing the budget 2013 plan, has been published in the Belgian Official Journal. This Law contains implements a.o. following tax measures: NOTIONAL INTEREST DEDUCTION The current maximum NID rates, which have been decreased to 3% for large enterprises and 3.5% for small and medium sized enterprises by the Law of 28 December 2011, remain intact. However, in order to align the NID rate with the most recent evolutions of the 10-year government bond rate, the NID rate is now calculated based on the average 10-year government bond rate of the third quarter of the penultimate year prior to the tax year. This new reference rate applies as of tax year 2014 (based on said 10-year government bond rate for July, August and September 2012), resulting in a lower effective NID rate of 2.742% for large enterprises and of 3.242% for small and medium sized enterprises for tax year Changes to the financial year s closing date as of 21 November 2012 are not opposable towards the tax authorities. SECRET COMMISSION TAX The draft bill contains some clarifications and changes in relation to the application of the 309% secret commissions taxation, in particular with respect to fringe benefits, the objective being to provide more legal certainty for the taxpayer. Under the old legislation, the secret commissions tax s application could only be avoided when the company demonstrated that unreported costs or benefits had been reported spontaneously by the beneficiary in his tax return. This exception is maintained. If this exception applies, the tax authorities already accepted in practice before the enactment of the Law of 17 June 2013 containing tax and financial measures that unreported costs and benefits are deducted by the company, although based on the text of the then applicable tax law such deduction was only possible if the secret commissions tax was applied. This administrative practice has now been formally included in the Income Tax Code by the Law of 17 June 2013, meaning that the cost is deductible in the hands of the company if the secret commissions tax does not apply because the cost or benefit was reported by the beneficiary. Business related restaurant expenses will henceforth fall outside the 309% tax s scope of application, meaning that unreported business related restaurant expenses will not activate the secret commissions tax. These changes are applicable as of tax year The tax authorities commented on the changes introduced by the Law of 17 June 2013 in the circular letter of 22 July The key message of this circular is that the effective taxation in the hands of the beneficiary is to be preferred over the application of the secret commissions taxation. Furthermore, the tax authorities adopt an even more flexible approach that goes beyond the softening that was introduced by the Law of 17 June 2013 by also accepting amongst others that: the secret commissions tax does not have to be applied in situations where the beneficiary is effectively taxed on the benefit without his consent; and the softening introduced by the Law of 17 June 2013 and the new circular letter can also be applied to pending disputes and files currently under audit, even if they relate to older tax years. First 2013 budget control measures implemented The tax measures in the March 2013 budget control agreement have been implemented by the Program Law of 28 June 2013, a.o.: NOTIONAL INTEREST DEDUCTION As of tax year 2014, taxpayers will no longer be allowed to claim both the 95% dividend received deduction (DRD) and notional interest deduction (NID) on treasury investments. The DRD regime will prevail, in which case these investments would have to be excluded from the NID calculation basis. NID can only be claimed for these investments if they are not eligible for DRD. WITHHOLDING TAX INCREASE ON LIQUIDATION BONUSES The current 10% liquidation withholding tax rate will be increased to 25% as of 1 October Hence, liquidation with application of the 10% withholding rate will, under certain conditions and depending on a company s year-end closing, be possible until 30 September A transitional regime has been introduced, under which taxed reserves could be incorporated into paid-in capital at the rate of 10% until 30 September 2014 and in case of a subsequent capital decrease, the incorporated taxed reserves will be taxed at the degressive rate of 15% (1st and 2nd year), 10% (3rd year), 5% (4th year) and 0% (as of 5th year).

10 Second 2013 budget control tax measures implemented A.o. following tax measures in the June 2013 budget control agreement have been implemented by the Law of 30 July 2013 containing miscellaneous provisions. FAIRNESS TAX The fairness tax is a separate tax that will be due if, for the same taxable period, a company distributes dividends and the taxable base is reduced with previous year tax losses and current year NID. The notion of dividends also includes reimbursements of paid-in capital, issue premiums and profit shares that, in tax terms, are treated as taxable dividends. Dividends subject to the recently introduced transitional 10% tax rate further to the modification of the liquidation withholding tax regime are excluded from the fairness tax. The taxable base of the fairness tax should be determined as follows: firstly, the taxable base is in principle equal to the positive difference between the gross amount of dividends declared for the taxable period and the final taxable base effectively subject to corporate tax as meant by Art of the Income Tax Code; secondly, this taxable base is reduced with the portion of the declared dividends originating from previously taxed reserves; to avoid "manipulations", only taxed profits reserved until and including tax year 2014 will be out of the fairness tax's scope; moreover, to identify the origin of reserves distributed, the LIFO (last in, first out)-method is used; thirdly, the balance is limited according to a percentage expressing the proportion between, on the one hand, (i) the previous year tax losses and current year NID (hence excluding any NID stock) that have been effectively deducted for the taxable period and, on the other, (ii) the taxable result of the taxable period exclusive of any tax-exempt write-offs, provisions and capital gains, i.e., the taxable base after the "first operation". On the taxable base, as determined above, the fairness tax is due at the rate of 5%, to be increased with the 3% crisis surcharge, leading to an effective tax rate of 5.15%. None of the tax attributes referred to in Art. 207 ITC (tax losses, NID, etc.) can be offset against this separate tax. The fairness tax will be subject to the obligation to make advance tax payments and will not be tax deductible. The fairness tax will also apply to non-resident companies with taxable presence in Belgium. For these nonresident companies, the notion of "distributed dividends" will mean "the portion of the gross dividend declared by the company, corresponding proportionally to the positive share of the Belgian establishment's accounting result in the global accounting result of the company". The fairness tax will not apply to companies that qualify under company law as SME's on a consolidated basis for the taxable period for which dividends have been distributed. The fairness tax will apply as of tax year An anti-avoidance measure disregards changes made as of 28 June 2013 to the financial year's closing date. It is debated whether the fairness tax complies with European law, specifically whether or not the fairness tax qualifies as a prohibited withholding tax under the EU Parent-Subsidiary Directive (cf. the EU Court of Justice jurisprudence in the cases Athinaiki and Burda). That is why the Government will notify the European Commission of this measure. VAT ON LAWYERS The current VAT exemption for lawyers is abolished as of 1 January budget control tax measures implemented ECJ issues decision in Argenta case The Court of Justice of the European Union (CJEU) has, on 4 July 2013, issued its judgment in the Argenta Spaarbank case (C-350/11). The CJEU followed the Advocate-General s advice and decided that the freedom of establishment principle is violated by a rule for calculating the notional interest deduction (NID). This rule states that the net assets of a permanent establishment (PE) located abroad, the income of which is tax exempt in Belgium, have to be excluded from the NID calculation basis. Notwithstanding this exclusion, Argenta Spaarbank claimed NID on its Dutch PE s net assets for tax year The tax authorities refused to grant this NID and the case was brought before the Antwerp Court of First Instance. On 24 June 2011, the Antwerp Court referred a prejudicial question to the CJEU, i.e. whether the exclusion of the Dutch PE s assets violates the freedom of establishment principle laid down in Article 43 of the EC Treaty (now Article 49 in the Treaty on the Functioning of the European Union). Against the taxpayer and the Commission, the Belgian Government argued during the proceedings that there is no violation; even if there would be one, it would be justified by the need to preserve the Belgian tax

11 system s coherence and equal distribution of taxation power among Member States. In his opinion to the CJEU, issued on 19 September 1992, Advocate-General Mengozzi suggested that the NID rule s violation of the freedom of establishment principle was a viable conclusion. On the one hand, taxpayers with a PE in Belgium (or a PE from which the income is not exempt in Belgium) are treated differently to taxpayers with a PE in another Member State and from which the income is exempt in Belgium. On the other, there is no sufficient justification for such restriction on freedom of establishment. The CJEU has followed the Advocate-General s opinion and found the provision contrary to EU law. The decision should not only impact Belgian companies with a PE in another EU Member State but also those with a PE in 2 of the 3 EEA Member States, Iceland and Norway. The judgment does not contain any limitations as to its temporal scope of application. Based on the court s reasoning, it seems likely that the provision excluding real estate (that is not part of a PE), located abroad and from which the income is exempt in Belgium, would also be considered contrary to EU law. It remains to be seen how and when the Belgian Government will adapt its legislation to comply with this decision. On 2 July 2013, in reply to an oral question, the Minister of Finance stated in the Finance Committee of the House of Representatives, that the CJEU decision needs to be examined in detail before commenting on its consequences. Law changing patent income deduction and withholding tax exemption for researchers On Friday 28 June 2013, the Law containing fiscal and financial measures was published in the Belgian Official Journal. This Law provides, amongst others, for changes with respect to the patent income deduction and the withholding tax exemption for qualified researchers. The entry into force of these changes can be summarised as follows: The percentage increase for the partial payroll tax exemption on qualified researchers wages, from 75% to 80%, applies to payroll tax due on wages received as of 1 July As of tax year 2014, small and medium sized companies (Article 15 of the Company Code) will be able to claim the patent income deduction even if the patent has not been developed or improved in an R&D centre. The definitions of the research and development projects or programmes concepts apply as of 1 January The mandatory upfront reporting of research and development programs with the Programmatorische Federale Overheidsdienst Wetenschapsbeleid / Service public de programmation de la Politique scientifique fédérale applies as of 1 January R&D projects and programs existing on 1 January 2014 have until 31 December 2014 to comply with the reporting obligation. For more details regarding these and other measures put forward by this Law, we refer to Deloitte s Economic Stimulus Plan website. Denmark Danish government and opposition agree on corporate tax cut The Danish government, the Liberal Party, the Liberal Alliance and the Conservative People's Party on April 24 agreed on a growth plan that includes an incremental reduction of the corporate tax rate to 22% in The six-year ( ), approximately DKK 90 billion (about $15.8 billion) plan is expected to contribute to growth and employment in Denmark. The Danish corporate tax rate (currently 25%) would be reduced by half a percentage point in 2014, an additional 1 percentage point in 2015, and a further 1.5 percentage points in 2016, bringing it to 22%. The reduction is intended to keep Denmark competitive and attract foreign investment. Corresponding to the lowering of the corporate tax rate, the payroll tax would be increased for the financial sector. According to the parties, the rate changes would yield DKK 700 MILLION (about $123 million) in tax savings for companies in 2014, rising to approximately DKK 4.3 billion (about $755 million) in The plan also includes an initiative to reduce production-related energy taxes and improve financing facilities for small and medium-size enterprises. The reduction of energy taxes would make companies' production costs lower since, among other things, the carbon tax on electricity and electricity distribution charges would be abolished.

12 In general, the VAT period for SMEs would be extended to 60 days. Also, the state investment fund (Vækstfonden) would offer additional venture capital to entrepreneurs. The scheme would improve access to capital for the group of entrepreneurs that requires relatively large capital (over DKK 2 million) but cannot provide adequate security. This group falls outside the Vækstfonden's existing system. A loan of approximately DKK 350 million (about $61.5 million) would be available annually from EU EU downplays leaked document outlining financial transaction tax concerns The European Commission has downplayed the significance of a leaked internal document outlining the concerns of the 11 EU Member States that have agreed to introduce the proposed financial transaction tax (FTT). Under the commission's FTT proposal, a 0.1% tax would be levied on all securities and bonds transactions and a 0.01% tax on the notional value of the contracts would be applied to derivatives transactions. The European Commission, which confirmed that the leaked document is indeed an EU Council working group document, told that it is merely part of the technical discussion process. According to the commission's revised draft directive for the FTT, which was released in February, the FTT is scheduled to take effect on 1 January Country by country reporting: a future challenge for multinationals? On 12 June 2013, the plenary European Parliament formally adopted the amended Accounting directive and the amended Transparency directive, both of which include country by country reporting for the extractive industry and logging of primary forests (Articles Accounting directive). The recently adopted EU country by country reporting requirements for the banking sector may also be published in the Official Journal still this month. The European Parliament and the Commission are now considering moves to bring in country by country reporting for large companies across all sectors. Note that the agreement of both the European Parliament and Council (Member States) would be needed for these measures to become law. Companies face growing pressure from the public, media and politicians for increased transparency on their tax reporting. If the country by country reporting s scope is extended to all industries, large companies will need to disclose their financials by country in greater detail, including profits, losses, taxes, loans, subsidies, etc. in all jurisdictions where they operate. Companies may also decide to rethink their overall communication strategy towards their investors, the media and general public. For example, some companies have already decided to apply the country by country reporting on a voluntary basis, thereby aiming to make that transparency work to their commercial advantage. France French court denies use of secret comparables in transfer pricing case In a decision of 5 February 2013, the Administrative Court of Appeal of Paris gave its decision in Nestlé Entreprises v. Minister of Economy and Finances (No. 12PA00469) regarding the use of secret comparables under the transfer pricing regulation, article 57 of the French Tax Code (FTC). Key elements of the decision are summarised below. Under article 57 of the FTC, the tax authorities may add back to the taxable income of French companies, or branches of foreign companies, profits indirectly transferred to related companies or head offices abroad. The issue was whether or not the secret comparable used by the tax authorities could be used to qualify the transaction as abnormally low under article 57 of the CGI. The Court of Appeal accepted the plaintiff's claim because the tax authorities failed in their obligation to use a valid comparable. While identifying the arm's length compensation, the tax authorities used as comparable the cash pooling operations of three major groups listed on the French Stock Exchange (CAC 40), but without any indication of: the name of these groups; the condition of these cash pool agreements; and especially

13 whether the comparable agreements included a guarantee similar to the guarantee granted to the plaintiff. Consequently, the Court of Appeal considered that such secret comparables cannot be used in order to qualify the transaction as abnormally low under article 57 of the FTC. Thus, the tax authorities failed to demonstrate that this transaction was an indirect transfer of profit under article 57 of the FTC. France announces details of anti-avoidance measures against tax fraud On 10 April 2013, the Council of Ministers published an official communication on a new set of anti-avoidance measures to fight against tax fraud. The text has been submitted to the French Parliament. However, no consensus could be reached between Upper and Lower Houses of the Parliament. It is therefore expected the discussion will resume after summer break. The text should be adopted by the end of the year. The key elements are summarised below. Hardening of reporting obligation To harden the fight against, large companies, banks, and wealthy individuals will bear new reporting obligations. Thus, French banks and companies will be required to report annually the list of their foreign subsidiaries, including specific details on the nature of their business, transactions, sales, employees, profits, taxes paid, and public aid received. Strengthening of investigative power The government plans to increase the police and judiciary authorities specialising in tax investigations staff and create a new prosecuting office for major corruption and tax fraud. Hardening of penalties for tax fraud The government will increase criminal penalties for major tax fraud and tax evasion. List of non-cooperative states or territories (NCSTs) The government proposes to add countries to the NCSTs list that will not cooperate actively with France. Currently, countries that have signed an exchange of information agreement with France are not included on the list even though in practice assistance is not given. Automatic exchange of information The government will push before the European institutions for the implementation of an automatic exchange of information within the EU. French President Francois Hollande has announced that a bill containing a series of anti-avoidance measures to "moralise" public life and fight tax fraud will be submitted to the Council of Ministers on 24 April Among the measures proposed is the creation of a high authority to control the estate assets of Cabinet ministers and the heads of major French administrations. To discourage the use of tax havens, new reporting obligations would also be introduced for large companies, banks, and wealthy individuals. French banks and companies would be required to submit annually a list of their foreign subsidiaries, including specific details about the nature of their business, their transactions, sales, employees, profits, taxes paid and public aid received. Strengthening transparency requirements under a new independent administrative authority. The anti-avoidance bill would require France's main political and administrative leaders to transmit to a new independent administrative authority (high authority) declarations of their estate assets, interest statements and declarations attesting to the completeness and accuracy of the information provided. Criminal penalties for failure to transmit the documents or for inaccurate reporting would be substantially strengthened. The declarations of estate assets and the interest statements of members of the government and members of Parliament would be made public, and the declarations of estate assets would be checked at the beginning and end of each term. There would also be a rule prohibiting lawmakers with parliamentary mandates from conducting any other professional or business activity (with some exceptions for professional activities that are compatible with the mandate). Strengthening the fight against economic and financial crime and tax havens

14 The fight against tax fraud and international tax evasion has become a key issue for France's sovereignty and the recovery of public accounts. The bill would therefore bolster the resources of the courts, the police, and the tax administration to pursue and identify complex tax fraud and money-laundering networks. A special prosecutor with national jurisdiction over cases of major corruption and substantial tax evasion would be created, and a central office to fight against fraud and corruption would be established within the Central Department of Judiciary Police. In the most complex cases of tax fraud and money laundering, the same special investigative techniques used to combat organised crime would be employed. The statute of limitations would be modified for the most serious offenses. Criminal penalties for tax evasion would also be increased for the worst offenses. Further, elected officials convicted of tax fraud or corruption would be ineligible for public office for 10 years or possibly permanently (with the possibility that the prohibition could be revoked). The government wants to strengthen mechanisms for fighting tax havens at the national, EU, and international levels by signing information exchange agreements with countries identified as tax havens and monitoring their implementation. To end banking secrecy and the concealment of income and assets, France has joined four other EU member states in support of a pilot automatic information exchange programme and is proposing at the EU level the elaboration of common rules governing third countries, including Switzerland. France also supports initiatives to fight aggressive tax planning by allowing companies to reduce their tax liability to account for the erosion of tax bases and the transfer of profits, particularly in the area of the digital economy, and has joined other member states in calling for the revision of the EU anti-money-laundering directive and greater transparency of corporate and legal entities such as trusts. Administrative guidelines released on new global cap on financial charges The French tax authorities (FTA) published long-awaited guidelines on the new limitation on the deduction of financing expenses. The Finance Bill for 2013 introduced a global cap on finance charges incurred by companies liable for corporate income tax, under which finance charges are capped at 85% (reduced to 75% as from FY 2014) of their net amount on the portion that remains deductible after application of the other limitation rules. The new limit on the deduction of finance charges applies to the net amount of finance charges, defined as finance expenses of the fiscal year as reduced by the financial profits of that fiscal year. Scope of new limitation and assessment rules The guidelines clarify the scope of the new limitation and the relevant assessment rules: Other aspects Finance expenses to be taken into account Finance expenses include all interest or similar expenses incurred with respect to amounts of money that have been made available to the company.. Financing income to be taken into account Financing income refers to all interest or similar income received in consideration for financing granted by the company to another party. Dividends and distributed income (regardless of whether they benefit from the EU parent-subsidiary directive) are not included. Characterization of finance charges disallowed under the global cap The disallowance of the financing charges under the new cap does not have any impact on the legal characterization of the disallowed portion in the hands of the company that receives the payment and, in particular, does not lead to a characterization of this portion as distributed income. As a result, the disallowed portion is not subject to the 3% surtax on distributed income introduced in Leasing transactions A portion of rent could be considered a finance charge if it is accrued under a finance lease, a lease with an option to purchase or a lease of movable property between related companies. The portion deemed to be finance charges is equal to the difference between the rent effectively booked and the annual depreciation of the property leased, as well as any incidental fees invoiced to the lessee. Royalties for concessions, patents, licenses, trademarks, software, etc. are not to be taken into account. There are some clarifications of subleasing transactions (i.e. the components of finance charges to be taken into account by a sub-lessee are defined by reference to those of its lessor). The guidelines also specify the order of priority in which the various limitations are to be applied in computing the finance expenses that are to be disallowed. The order in which these limitations are to be applied is as follows: first the interest rate limit, then the thin capitalization rule, then the Carrez rule and finally the global

15 cap limitation. The guidelines confirm that the global cap should apply to financing expenses net of the amounts already disallowed under previous specific limitation mechanisms. Therefore, the base for calculating the global limitation does not include financing expenses disallowed under any other limitation rules. The application of the new limitation in the context of a tax consolidated group also is clarified (including the order of priority in applying the different existing limitation rules). Tax authorities clarify application of dividend surtax to PE s The French tax authorities issued administrative guidance on 10 April 2013 that aims to clarify the new 3% surtax on dividend distributions and deemed dividend distributions levied on French entities subject to corporate income tax, including French permanent establishments (PEs) of foreign companies. The surtax was introduced via the revised budget law for The administrative guidance clarifies, in particular, the application of the surtax to PEs and in the context of a tax consolidated group. General rule Under the revised budget law, profits of foreign entities are subject to the 3% surtax when they cease to be at the disposal of a PE. The guidance provides additional details on how a PE is to compute its taxable base for purposes of the surtax. Specifically, amounts that cease to be at the disposal of a PE correspond to withdrawals made by the head office and certain expenses disallowed under the French corporate income tax rules. Withdrawals by a head office This category includes all withdrawals made by a foreign head office from a PE s tax assets (i.e. assets recorded in the tax balance sheet of the PE), such as withdrawals of cash and/or property of the PE, as well as amounts transferred indirectly for commercial purposes, but under non-arm s length conditions. The surtax does not apply to withdrawals by a foreign entity from its French branch as a result of their commercial relationship (e.g. where a French branch remunerates its foreign head office for a transfer of goods or services under arm s length conditions), provided the transactions are recorded in separate accounts. The administrative guidance states that capital contributions cannot be netted off against withdrawals (thus reducing the taxable base), even if they are effected within the same financial year. Nondeductible expenses This category comprises withholding tax on passive income that is paid in the relevant financial year. Nondeductible expenses also include any deemed distributions within the meaning of the French Tax Code, such as: Hidden compensation and benefits; Excessive remuneration and extravagant expenditure; Excess interest attributed to shareholders; and Donations, subsidies and miscellaneous overhead costs that are added back to taxable income. For purposes of determining the taxable base of the 3% surtax, a PE must maintain records of dividends distributed and any withdrawals made for the relevant financial year to be in a position to answer any questions that may be raised by the French tax authorities. PEs of EU entities Despite the above, it is worth noting that profits that cease to be at the disposal of a French PE of a foreign entity that has its place of effective management in an EU member state and is liable to corporate income tax in that county without benefiting from any exemption will not be subject to the 3% surtax. The administrative guidance is silent, however, on the potential incompatibility with EU law of the 3% surtax as it applies to companies resident in another EU member state. Distributions between entities within a consolidated tax group A specific exemption from the 3% surtax is provided for dividends paid between members of a French tax consolidated group. Profits distributed by a group company to a non-group company, or vice-versa, are outside the scope of the exemption. However, where a group company is held indirectly by the head of the tax consolidated group through an EU intermediate holding company (i.e. a structure known as a Papillon structure), the surtax will not apply to distributions made through the foreign entity, provided the dividends are ultimately transferred to the French tax consolidated group (under a refund claim procedure). In this regard, there must be evidence that the distribution comes from a group company and is paid to another group company through an interposed entity.

16 While the administrative guidance makes welcome clarifications on the application of the surtax, unfortunately it does not answer the outstanding questions practitioners have on some potential infringements of, or conflict with, EU law (in particular, potential discrimination against a French subsidiary with an EU parent company). Germany Scope of dual consolidated loss rules broadened The scope of Germany s dual consolidated loss (DCL) rule has been expanded to apply to any situation in which the losses of either a group parent or subsidiary are taken into account in a foreign jurisdiction. Under the amended rule, losses of a controlling entity or a controlled entity in a German tax consolidated group are disallowed for German tax purposes to the extent such losses are taken into account for foreign tax purposes at the level of the controlling entity, the controlled entity or any other person, while under the old DCL rule, the use of losses at the level of the controlling entity was disallowed only where the losses were taken into account in a foreign jurisdiction by the controlling entity under a regime similar to the German tax consolidated group regime. The scope of Germany s dual consolidated loss (DCL) rule has been expanded to apply to any situation in which the losses of either a group parent or subsidiary are taken into account in a foreign jurisdiction. The new rule may affect both inbound and outbound structures. The changes to the DCL rule were included in the Act on the Modification and Simplification of Business Taxation and of the Taxation of Travel Expenses, which was passed by the upper house of parliament on 11 February The president signed the act on 20 February and it became effective on 26 February. Content of new rule The wording of the new DCL rule is as follows: Losses of a controlling entity or a controlled entity in a German tax consolidated group are disallowed for German tax purposes to the extent such losses are taken into account for foreign tax purposes at the level of the controlling entity, the controlled entity or any other person. The amended wording leads to a significant extension of the rule. Under the old DCL rule, the use of losses at the level of the controlling entity was disallowed only where the losses were taken into account in a foreign jurisdiction by the controlling entity under a regime similar to the German tax consolidated group regime. As a result, the rule was of limited practical relevance. While the original intent of both the old and the amended DCL rules was to disallow the simultaneous use of losses for German and foreign tax purposes by dual resident companies that are part of a German tax group, this intent is not expressed in the wording of either version of the rules. Scope of amended DCL rule The amended version of the DCL rule applies to both controlling entities and controlled entities in a German tax consolidated group, whereas the old rule applied only to controlling entities in such a group. The original intent of the legislator to target double dip structures where dual resident companies are used is not included in the final amended version of the DCL rule. The amended wording of the rule includes a different technical description of the term losses ( negative Einkuenfte instead of negative Einkommen in the original version), which may lead to the result that the rule applies where the controlling entity is in a loss position on a stand-alone basis, i.e. profits transferred under a profit and loss pooling agreement from the controlling entity s subsidiaries cannot be taken into account. The same applies for a controlled entity, i.e. whether the controlled entity is in a loss position must be analyzed on a standalone basis. Specific expenses at the level of the controlling entity/controlled entity that are taken into account in a foreign jurisdiction for tax purposes should not fall within the scope of the rule as long as the controlling entity/controlled entity is in a profit position (on a stand-alone basis). Losses of the controlling entity or a controlled entity are disallowed for German tax purposes only to the extent they are taken into account for foreign tax purposes. It is worth noting that the treatment of the controlling entity (and in certain cases the treatment of the controlled entity) in a German tax group as a flow-through /disregarded entity for US tax purposes may trigger the amended DCL rule if losses of one of the German entities are recognized for US tax purposes. It is unclear whether the rules also apply where expenses for German tax purposes at the level of the controlling entity do not give rise to corresponding income at the level of the recipient for foreign tax purposes (i.e. where the relevant income stream is disregarded). Such situations would need to be analyzed carefully. Finally, there is some discussion as to whether the new DCL rule would apply to a partnership that is a controlling entity in a tax group (a partnership can never be a controlled entity in a tax group). If so, this could affect structures where financing expenses in connection with the acquisition of the partnership interest are

17 deducted at the level of the foreign partner and at the level of the German partnership under the special business expenses concept under German law. Consequences of amended DCL rule As a result of the application of the amended DCL rule, losses are disallowed for German tax purposes and losses so disallowed cannot be carried forward. It is unclear whether the disallowance of losses would apply only for corporate income tax purposes or also for trade tax purposes. Prevailing opinion under the old rules was that the disallowance did not apply for trade tax purposes, but whether the same arguments can be used under the new rule is questionable. Based on the actual wording of the law, the new DCL rule will apply to all open tax years and, therefore, may affect prior years, although it is questionable whether retroactive application of the rules for years before 2012 is in line with the German constitution. It also is questionable whether either version of the DCL rules is in line with the EU freedom of establishment principle following the decision of the Court of Justice of the European Union in the Philips Electronics case, in which the court held that a restriction under the UK group relief rules, under which a loss could be transferred only if it was not utilized abroad, whether by the same person or a different person, constituted an infringement of the freedom of establishment. Germany amends taxation of portfolio dividends and introduces new refund procedure for tax withheld Germany s upper house of parliament passed a bill on 1 March 2013 that introduces a 10% minimum ownership requirement for a corporate taxpayer to benefit from the 95% tax exemption on dividends and introduces a procedure that allows corporate shareholders resident in other EU/EEA member states to claim a refund of the tax withheld on dividend distributions in certain cases. The bill responds to the 2011 decision of the Court of Justice of the European Union (CJEU) in European Commission v. Federal Republic of Germany, in which the court held that Germany s withholding tax regime violates the free movement of capital provisions in the EU treaty and the EEA agreement with respect to shareholdings that are not covered by the EU parentsubsidiary directive, i.e. shareholdings of EU companies of less than 10% and shareholdings of EEA companies. The 10% ownership test will apply on a stand-alone basis, i.e. direct and indirect ownership chains cannot be counted together. The new rule applies only to dividends and should not have any effect on the 95% participation exemption for capital gains, even if the shareholder owns less than 10% in the company whose shares it sold. Germany s upper house of parliament passed a bill on 1 March 2013 that introduces a 10% minimum ownership requirement for a corporate taxpayer to benefit from the 95% tax exemption on dividends and introduces a procedure that allows corporate shareholders resident in other EU/EEA member states to claim a refund of the tax withheld on dividend distributions in certain cases. Since the lower house had already agreed to the proposal on 28 February, the bill will become effective once it is signed by the president and published in the federal gazette. The bill responds to the 2011 decision of the Court of Justice of the European Union (CJEU) in European Commission v. Federal Republic of Germany, in which the court held that Germany s withholding tax regime violates the free movement of capital provisions in the EU treaty and the EEA agreement with respect to shareholdings that are not covered by the EU parent-subsidiary directive, i.e. shareholdings of EU companies of less than 10% and shareholdings of EEA companies. Two different proposals were discussed during the legislative process to bring the German dividend taxation rules in line with EU law: The plan proposed by the government included a refund of withholding tax for shareholdings of EU resident companies that were below 10%. However, the upper house of parliament, which is controlled by the opposition, proposed the abolition of the participation exemption for portfolio dividends that is now to be enacted. For constitutional reasons, it was impossible to retroactively increase the taxation of portfolio dividends, and the enacted bill includes both the refund procedure as suggested by the lower house, as well as the taxation of portfolio dividends as suggested by the upper house. The new rules on domestic portfolio dividends will apply to dividends received on or after 1 March 2013, whereas the refund procedure will apply to refund claims that already have been submitted or will be submitted in respect of dividends received on or before 28 February Background Germany levies a 25% withholding tax (plus the 5.5% solidarity surcharge, giving rise to an effective rate of %) on dividend distributions. However, corporate shareholders that are resident in Germany or that hold the shares through a German permanent establishment are subject to a tax assessment procedure under which they generally enjoy an effective 95% exemption; 100% of the dividends are treated as exempt, with 5% treated as a nondeductible business expense. As a result, such shareholders receive a refund/credit of all of the withholding tax. By contrast, before the new bill, nonresident corporate shareholders were not subject to the assessment procedure with respect to dividend income, although if such shareholders met certain activity requirements, 40% of the withholding tax was refunded, resulting in an effective rate of %. EU corporate shareholders with a participation of 10% or more may qualify for application of the EU parentsubsidiary directive, which will reduce the withholding tax rate to 0%; for corporate shareholders outside the EU, the withholding tax rate may be reduced under an applicable tax treaty. The effect of these rules was that nonresident corporate shareholders with a participation of less than 10% were subject to a higher tax burden on their dividend income than German residents.