Hybrid Financial Instruments In International Tax Law

Author : Jakob Bundgaard
Publisher : Kluwer Law International B.V.
Page : 498 pages
File Size : 40,7 Mb
Release : 2016-11-15
Category : Law
ISBN : 9789041183187

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Hybrid Financial Instruments in International Tax Law by Jakob Bundgaard Pdf

Financial innovation allows companies and other entities that wish to raise capital to choose from a myriad of possible instruments that can be tailored to meet the specific business needs of the issuer and investor. However, such instruments put increasing pressure on a question that is fundamental to the tax and financial systems of a country – the distinction between debt and equity. Focusing on hybrid financial instruments (HFIs) – which lie somewhere along the debt-equity continuum, but where exactly depends on the terms of the instrument as well as on applicable laws – this book analyses their treatment under both domestic law and tax treaties. Key jurisdictions, including the EU, some of its Member States, and the United States, are covered. Advocating for a broader scope of application of HFIs as part of the financing of companies in Europe alongside traditional sources of debt and equity financing, the book addresses such issues and topics as the following: • problems associated with the debt-equity distinction in international tax law; • cross-border tax arbitrage and linking rules; • drivers behind the use and design of HFIs; • tax law impact of perpetual and super maturity debt instruments, profit participating loans, convertible bonds, mandatory convertible bonds, contingent convertibles, preference shares and warrant loans on HFIs; • financial accounting treatment; • administrative guidance; • influence of the TFEU on Member States’ approaches to classification of HFIs; • interpretation of the Parent-Subsidiary Directive by the European Court of Justice; • applicability of the OECD Model Tax Convention; and • implications of the OECD Base Erosion and Profit Shifting (BEPS) project. Throughout this book, the analysis draws upon preparatory works, case law, and legal theory in English, German, and the Scandinavian languages. In conclusion, the author considers tax policy issues, and identifies and outlines possible high-level solutions. Actual or potential users of HFIs will greatly appreciate the clarity and insight offered here into the capacity and tax implications of HFIs. The book not only examines whether existing legislation is sufficient to handle the issues raised by international HFIs, but also provides an in-depth analysis of the interaction between corporate financing and tax law in the light of today’s financial innovation. Corporate executives and their counsel will find it indispensable in the international taxation landscape that is currently coming into view, and academics and policymakers will hugely augment their understanding of a complex and constantly changing area of tax law.

Author : Jakob Bundgaard
Publisher : Unknown
Page : 128 pages
File Size : 51,5 Mb
Release : 2024-05-22
Category : Electronic
ISBN : 8792598501

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Hybrid Financial Instruments in International Tax Law by Jakob Bundgaard Pdf

Author : Félix Daniel Martínez Laguna
Publisher : Kluwer Law International B.V.
Page : 685 pages
File Size : 42,9 Mb
Release : 2019-06-12
Category : Law
ISBN : 9789403510842

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Hybrid Financial Instruments, Double Non-Taxation and Linking Rules by Félix Daniel Martínez Laguna Pdf

Hybrid Financial Instruments, Double Non-taxation and Linking Rules Félix Daniel Martínez Laguna Hybrid financial instruments (HFIs) are widespread ordinary financial instruments that combine debt and equity features in their terms and design and may lead to double non-taxation across borders. This important book provides a deeply informed and critical analysis and guide to the “linking rules” developed to combat double non-taxation stemming from HFIs within the framework of the Base Erosion and Profit Shifting project of the Organisation for Economic Co-operation and Development (OECD) and the anti-avoidance initiatives of the European Union (EU). These complex rules have now become essential in international taxation. The book deals incisively with crucial theoretical and practical issues as the following: Economic and legal reasons for financing business activity through debt instruments, equity instruments and/or HFIs. Qualification of financial instruments from different perspectives such as economics, corporate finance, corporate law, financial accounting law, regulatory law and tax law and their interrelation. The concept of double non-taxation as a mere outcome of parallel exercises of sovereignty by different states and the role it plays within the international debate. The concepts of tax planning, tax avoidance and the misleading concept of aggressive tax planning within a tax competition international scenario and their relation with HFIs. Comprehensive policy, legal and technical detail and explanation of the linking rules proposed by the OECD (i.e., BEPS Project Action 2) and the EU (e.g., Anti-Tax Avoidance Directive). The (in)compatibility of linking rules with existing tax treaty rules and EU primary law. The author refers throughout to relevant model convention provisions, EU case law and a vast number of references of official documentation and literature. With its detailed attention to the concept and legal nature of HFIs and double non-taxation, the critical and comprehensive analysis of the linking rules developed by the OECD and the EU, this provocative book allows to reconsider the legality of these linking rules and will quickly become a much-used problem-solving resource for policymakers, tax practitioners, tax authorities and tax academics. This book allows to rethink whether linking rules relate to a solution or create actual legal issues.

Author : Sven-Eric Bärsch
Publisher : Springer Science & Business Media
Page : 406 pages
File Size : 42,7 Mb
Release : 2012-12-13
Category : Business & Economics
ISBN : 9783642324574

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Taxation of Hybrid Financial Instruments and the Remuneration Derived Therefrom in an International and Cross-border Context by Sven-Eric Bärsch Pdf

Despite the enormous diversity and complexity of financial instruments, the current taxation of hybrid financial instruments and the remuneration derived therefrom are characterized by a neat division into dividend-generating equity and interest-generating debt as well as by a coexistence of source- and residence-based taxation. This book provides a comparative analysis of the classification of hybrid financial instruments in the national tax rules currently applied by Australia, Germany, Italy and the Netherlands as well as in the relevant tax treaties and EU Directives. Moreover, based on selected hybrid financial instruments, mismatches in these tax classifications, which lead to tax planning opportunities and risks and thus are in conflict with the single tax principle, are identified. To address these issues, the author provides reform options that are in line with the dichotomous debt-equity framework, as he/she suggests the coordination of either tax classifications or tax treatments.

Author : Marjaana Helminen
Publisher : Kluwer Law International B.V.
Page : 306 pages
File Size : 51,9 Mb
Release : 2017-05-02
Category : Law
ISBN : 9789041183958

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The International Tax Law Concept of Dividend by Marjaana Helminen Pdf

The distribution of profits between corporations resident in different jurisdictions gives rise to both significant tax planning opportunities and tax risks. As cross-border transactions between corporations grow in number and complexity, the question of how a profit distribution is classified for corporate income tax purposes becomes increasingly important, particularly in the context of issues such as double taxation, non-taxation and tax neutrality. The OECD BEPS project has only increased the relevance. This unique work discusses the international tax law rules determining which transactions may be classified and taxed as dividends and how possible classification conflicts may be resolved. The author examines the tax classification of various inter-corporate transactions, including: – Payments made under dividend-stripping arrangements. – Fictitious profit distributions. – Economic benefits in the context of transfer pricing. – Returns on debt-equity hybrids. – Interest payments in thin capitalization situations and distributions following liquidation. The analysis of each transaction refers to international tax law. Most weight is given to tax treaties and EU tax law, including the BEPS development. The approaches adopted in different states’ national tax law are covered by a more general analysis. The comprehensive coverage and the practical nature of The International Tax Law Concept of Dividend make it an essential acquisition for tax practitioners, researchers and tax libraries worldwide.

Author : Lorenzo Sasso
Publisher : Kluwer Law International B.V.
Page : 248 pages
File Size : 42,5 Mb
Release : 2013-08-01
Category : Law
ISBN : 9789041148513

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Capital Structure and Corporate Governance by Lorenzo Sasso Pdf

Despite a clear distinction in law between equity and debt, the results of such a categorization can be misleading. The growth of financial innovation in recent decades necessitates the allocation of control and cash-flow rights in a way that diverges from the classic understanding. Some of the financial instruments issued by companies, so-called hybrid instruments, fall into a grey area between debt and equity, forcing regulators to look beyond the legal form of an instrument to its practical substance. This innovative study, by emphasizing the agency relations and the property law claims embedded in the use of such unconventional instruments, analyses and discusses the governance regulation of hybrids in a way that is primarily functional, departing from more common approaches that focus on tax advantages and internal corporate control. The author assesses the role of hybrid instruments in the modern company, unveiling the costs and benefits of issuing these securities, recognizing and categorizing the different problem fields in which hybrids play an important role, and identifying legal and contracting solutions to governance and finance problems. The full-scale analysis compares the U.K. law dealing with hybrid instruments with the corresponding law of the most relevant U.S. jurisdictions in relation to company law. The following issues, among many others, are raised: decisions under uncertainty when the risks of opportunism of the parties is very high; contract incompleteness and ex post conflicts; protection of convertible bondholders in mergers and acquisitions and in assets disposal; use of convertible bonds to reorganise and restructure a firm; timing of the conversion and the issuer’s call option; majority-minority conflict in venture capital financing; duty of loyalty; fiduciary duties to preference shareholders; and financial contract design for controlling the board’s power in exit events. Throughout, the analysis includes discussion, comparison, and evaluation of statutory provisions, existing legal standards, and strategies for protection. It is unlikely that a more thorough or informative account exists of the complex regulatory problems created by hybrid financial instruments and of the different ways in which regulatory regimes have responded to the problems they raise. Because business parties in these jurisdictions have a lot of scope and a strong incentive to contract for their rights, this book will also be of uncommon practical value to corporate counsel and financial regulators as well as to interested academics.

Author : Gaspar Lopes Dias V.S.
Publisher : Kluwer Law International
Page : 0 pages
File Size : 43,7 Mb
Release : 2015
Category : Law
ISBN : 9041158758

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Tax Arbitrage Through Cross-border Financial Engineering by Gaspar Lopes Dias V.S. Pdf

This book explores tax arbitrage opportunities resulting from financial engineering techniques with cross-border financial instruments such as hybrids, synthetics, and non-traditional financial instruments. Firstly the author clarifies the concept of three kinds of complex financial instruments, and thereafter he discusses the most adequate tax treatment of these instruments in cross-border situations. For this purpose he identifies economic substance as an objective benchmark for the taxation of financial instruments to achieve greater international tax neutrality, and examines the role of the expected return taxation theory. The book also contains a comparative analysis of relevant developments in a number of jurisdictions, including Australia, Belgium, Brazil, Luxembourg, Portugal, UK and USA.

Author : Moritz Scherleitner
Publisher : Unknown
Page : 128 pages
File Size : 51,7 Mb
Release : 2020
Category : Electronic
ISBN : 9087226322

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Addressing Tax Arbitrage with Hybrid Financial Instruments by Moritz Scherleitner Pdf

Author : Brian J. Arnold
Publisher : Kluwer Law International B.V.
Page : 275 pages
File Size : 45,7 Mb
Release : 2016-01-21
Category : Law
ISBN : 9789041159816

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International Tax Primer by Brian J. Arnold Pdf

International Tax Primer provides an introduction to the policies that countries seek to advance with their international tax rules, with numerous examples drawn from the practices of both developed and developing countries. This third edition has been expanded substantially, due to the major developments that have occurred since the second edition of this indispensable resource appeared in 2004 – not least the fact that innumerable smalland medium-sized firms, as well as individuals, now engage in cross-border transactions that cause them and their tax advisers to confront international tax issues on a regular basis. Moreover, as the countries of the world have become increasingly integrated economically, the importance of the major issues that a country must confront in designing its international tax rules and in coordinating those rules with the tax systems of its trading partners has mushroomed. The book strikes a balance between the specific and the general by illustrating the funda mental principles and structure of international tax with frequent reference to actual practice in a variety of countries. Coverage includes the following: • role of the tax adviser in planning international transactions; • taxation of residents on foreign income and of non-residents on domestic income; • mechanisms used to mitigate the risks to taxpayers of international double taxation; • transfer pricing rules to prevent the avoidance of tax by multinational corporations; • anti-avoidance measures dealing with tax havens, treaty shopping, and other offensive tax planning activities; • overview and analysis of the provisions of bilateral tax treaties and the OECD and UN • Model Treaties on which they are generally based; and • challenges posed by taxation of income derived from the digital economy. New material in the third edition includes analysis of the OECD’s initiative against base erosion and profit shifting (BEPS), tax aspects of hybrid entities and financial instruments, and taxation of fees for technical services as proposed under the UN Model Treaty. Although of greatest value to tax practitioners and government officials confronting interna tional tax for the first time, this book is sure to continue in use by tax professionals at every level of experience and on a worldwide basis.

Author : OECD
Publisher : OECD Publishing
Page : 456 pages
File Size : 51,5 Mb
Release : 2015-10-05
Category : Electronic
ISBN : 9789264241138

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OECD/G20 Base Erosion and Profit Shifting Project Neutralising the Effects of Hybrid Mismatch Arrangements, Action 2 - 2015 Final Report by OECD Pdf

Addressing base erosion and profit shifting (BEPS) is a key priority of governments. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. This publication is the final report for Action 2.

Author : Anonim
Publisher : Unknown
Page : 218 pages
File Size : 50,7 Mb
Release : 1990
Category : International business enterprises
ISBN : 1850611912

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The Use of Hybrid Financial Instruments in Cross-border Transactions by Anonim Pdf

Author : Jeremy Bradburne,L. Anthony Joseph,Bruce Kayle,Masatami Otsuka,Gregory May
Publisher : Unknown
Page : 288 pages
File Size : 52,6 Mb
Release : 1994
Category : Bonds
ISBN : STANFORD:36105060983751

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Butterworths International Taxation of Financial Instruments and Transactions by Jeremy Bradburne,L. Anthony Joseph,Bruce Kayle,Masatami Otsuka,Gregory May Pdf

Thorough treatment of international taxation aspects of financial instruments. The treatment covers general US tax principles, equities, debt securities and derivatives and other financial instruments.

Author : Organisation for Economic Co-operation and Development
Publisher : OECD
Page : 128 pages
File Size : 49,6 Mb
Release : 1994
Category : Business & Economics
ISBN : STANFORD:36105016365590

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Taxation of New Financial Instruments by Organisation for Economic Co-operation and Development Pdf

Presents the results of an analysis of the application of domestic laws and tax treaties to four particular types of instruments: interest rate swaps, financial futures, options to by shares, and bonds issued at a deep discount. Explores the possibility of arriving at consistent treatment of these instruments to provide greater certainty for both tax administrators and the financial markets.

Author : A. Czollak
Publisher : Unknown
Page : 128 pages
File Size : 44,9 Mb
Release : 2019
Category : Electronic
ISBN : OCLC:1182813435

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The Impact of the New General Anti-avoidance Rules on the Assessment of Hybrid Financial Instruments and Entities by A. Czollak Pdf

Hybrid financial instruments and entities lack any express regulation within Chilean tax law. This legal void, alongside the highly formalistic interpretation of the law applied by the Chilean tax authorities, has led to a rejection of transparent entities for Chilean tax purposes, and a classification of hybrid financial instruments as "debt" or "equity" based solely on formal arguments. New general anti-avoidance rules (2014) have introduced a substance-over-form principle, which is starting to be factually and preventively applied by the Chilean tax authorities. This analysis aims to illustrate the above-mentioned trend, in particular as it relates to hybrid financial instruments and entities, traditionally "no man's land" for tax purposes.

Author : Angharad Miller,Lynne Oats
Publisher : Tottel Publishing
Page : 0 pages
File Size : 43,8 Mb
Release : 2014
Category : Double taxation
ISBN : 1780434537

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Principles of International Taxation by Angharad Miller,Lynne Oats Pdf

This book provides an introduction to international taxation. Whilst using some examples from the UK tax system, the book presents its material in a global context, explaining the variety of approaches used around the world to deal with central issues that arise in international tax. It covers the basics on double tax relief, gives an introduction to double tax treaties and their use. Covers the fundamental issues of transfer pricing. Looks at the types of tax planning undertaken by multinational groups of companies to minimise the tax burden. It looks at the measures being taken by governments to prevent tax avoidance and evasion through the use of tax havens. It furthers covers the OECD's initiative to curb base erosion and profit shifting, the problems and tax liabilities encountered when providing cross-border services. It also examines the international tax aspects of group financing, hybrid entities and hybrid financial instruments, and it covers recent case law on permanent establishments, entity characterisation, transfer pricing and limitation of benefits.