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News

Investment protection: how to setup an investment assets protection structure in the Netherlands.

By Legal, News

On Tuesday, February 2, the second webinar of KC Legal took place, where the speakers from NL-investmentconsulting and KC Legal – Nikos Lavranos and Friggo Kraaijeveld took part.

During the webinar speakers discussed BITs, its benefits, operation, Yukos case, Vodafone case, tax treaties, international arbitration and its usage against unfair government measures. Nikos Lavranos highlighted the ways to achieve optimal asset protection through BITs and demonstrated how it can benefit business. Throughout the webinar Mr. Lavranos illustrated substantive investment protection standards. The expert also discussed how to access the international arbitration and provided the cases where international arbitration was used against unfair government measures. In addition, the expert gave advice on setting up a company structure for optimal asset protection.

The second speaker, Friggo Kraaijeveld, spoke about international tax treaty dispute resolution and explained its general principles and aims. “What we want to achieve with tax treaty protection is to avoid double taxation” – pointed out the partner of KC Legal. “Setting up an investment protection treaty is some kind of insurance to avoid additional costs” – added Friggo.

KC Legal and NL-investmentprotection are the leading firms in their field. You can always reach us by LinkedIn or by e-mail. We will be glad to assist and help your business to grow.

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IR Global Tax Virtual Series 2018

By News, Tax

Tax Efficient Inbound Investment – Tax Structures for Cross-Border Acquisitions.

Anyone considering an inbound investment into another country or jurisdiction must give serious thought to taxation. Issues such as privacy, accurate asset valuation and liability protection are important, but it is the tax efficiency of a foreign investment that will most likely measure its long-term success.

There are, of course, many different types and methods of investment, whether that be via direct acquisition of a capital asset, the purchase of shares in an existing business or a real estate transaction. A smart investor will study the rules and regulations that apply to each scenario in their jurisdiction of choice, and adhere to them while minimising tax liability.

Investment by cross-border merger or acquisition is one area that has received much publicity recently, as the Organisation for Economic Co-operation and Development (OECD) works to redress certain tax-efficient structures legitimately used by smart corporates. It’s Base Erosion and Profit Shifting (BEPS) legislation is designed to address the practice of shifting profits and assets across borders to minimise overall global taxation.

This drive to halt BEPS has affected various tax reduction techniques, including patent box regimes, interest deductibility and offshore structures (via business substance tests). Buyers may also have contingent tax liabilities due to BEPS exposure under the seller’s aegis.

Where smaller investments are concerned, the rules are no less complex, as we will learn in the following discussion. For countries like the USA, which receives significant inward investment, there are withholding taxes for foreign investors on the sale of assets and the receipt of ‘soft’ income, as well as death taxes and individual state taxes to consider.

In Italy, on top of corporation tax of 24 per cent, there is a regional tax on productive activities of 4.82 per cent, which many investors will not be aware of. Employing an experienced tax advisor in the jurisdiction to be invested in, is crucial before any other decisions are made. They will help investors to decide which vehicles are best to hold assets and which jurisdictions have the most favourable tax treaties to eradicate or reduce withholding tax. The advisor will also be able to ‘read between the lines’ of complex tax legislation, structuring transactions that are tax efficient and also tax compliant.

Examples include the concept of Fiscal Unity discussed here by Friggo Kraaijeveld in The Netherlands, the use of the European Union’s Parent Subsidiary Directive (PSD) to reduce withholding tax, as explained by Tommaso Fonti in Italy, or the Portfolio Interest Exemption, employed in the USA by Jacob Stein.

They will also have details of any tax incentives offered by various governments to attract inbound investment and be able to guide investors in the customs and culture of tax authorities that may be very different from those they are used to.

The following pages contain advice and guidance from five of IR Global’s tax experts and should provide an interesting insight into the many and varied tax-orientated challenges faced in pursuit of profitable foreign investment.

Download full document here: IR Global Tax Virtual Series 2018 – Tax Efficient Inbound Investment