1. Tax treasury trends in Europe: A Europe without interest withholding tax?
- Author
-
De Haen, Kurt and de Clippele, Philippe
- Subjects
WITHHOLDING tax ,CORPORATE finance ,FLOW of funds ,INTEREST rates ,ROYALTIES (Copyright) ,CASH flow ,MONETARY unions - Abstract
On 3rd June, 2003, the Council of the European Union adopted Directive 2003/49/EC on the common tax rules for payments of interest and royalties made between associated companies in different member states — the so-called Interest and Royalties Directive (IRD). This paper describes how implementation of the IRD should, in numerous cases, allow relief from withholding tax on financial (interest) flows between related companies. This may be of particular interest to treasurers implementing and managing complex multi-country financing structures and cashpooling schemes. The paper will analyse the scope and features of the Directive and its implementation status in 27 EU member states. As a matter of illustration, the paper will describe the transposition of the Directive in Belgium. The paper also analyses extension of the scope of the Directive to Switzerland, by way of the EU-Swiss ‘Bilateral II Agreement’. The purpose of this paper is not so much to give an in-depth analysis of specific tax and legal principles underlying the Directive but to provide the reader with a critical overview of how the various member states have implemented the Directive and thus allow flows of intercompany interest free from withholding tax. [ABSTRACT FROM AUTHOR]
- Published
- 2008