Innovative regime proposed for Dutch-based group finance companies

Article Abstract:

Dutch group finance companies would be eligible to receive a lower tax rate when financing their non-Dutch affiliates, according to proposed legislation being considered in Parliament. Financing income is taxed at 35% under existing law, in stark contrast to other favorable tax laws found in the Netherlands, but the effective rate under this innovative proposal would be around 7%. If the proposal is approved, Dutch-based group finance companies would donate intercompany financing income to a special tax reserve which, in turn, would allow them to obtain this significantly lower tax rate.

Administration of General Economic Programs, Regulation of Multi-Nationals, Netherlands, Affiliated corporations, Corporate taxes, Multinational corporations, Corporations, International trade regulation

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The death of Section 936: closing a loophole or poor policy?

Article Abstract:

IRC Section 936, a corporate tax incentive intended to spur job creation in Puerto Rico, should be repealed because this unsound tax policy comes close to being a loophole. US-owned subsidiaries' Puerto Rican-generated income is tax exempt under s. 936, but there are better means of stimulating the country's economy than through this type of US tax incentive. The proposed repeal's grandfather provision will ease its impact on the Puerto Rican economy during the phase-out period.

Tax Deductions & Exemptions, United States, Analysis, Economic aspects, Tax deductions, Puerto Rico, Tax incentives

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Belgian budgetary income tax measures of 1997: major changes for the participation exemption and introduction of thin capitalization rules

Article Abstract:

The Belgian government issued a Royal Decree on Dec 20, 1996 which operates on Belgian holding company-finance company corporate structures often invested in by international persons. Anti-abuse rules aimed at the participation exemption were included in the Decree. New thin capitalization rules were added making interest nondeductible if a stated debt-to-equity ratio is exceeded.

Foreign investments, Belgium

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