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Tax Authorities Eye GSK-HUL Merger: Could Attract Tax on Long-Term Capital Gains and Brand Transfer

Tax Authorities Eye GSK-HUL Merger: Could Attract Tax on Long-Term Capital Gains and Brand Transfer

GSK Consumer Healthcare India (“GSKIndia”) is in the process of merging with Hindustan Unilever Ltd (“HUL”) inthe biggest deal in India’s consumer packaged goods space, valued at ap- proximately $4.5 billion. Although the transaction is structured to be tax-free for shareholders, plenty of room exists for the Indian tax authorities to assert tax from the companies: The transfer of a brand owned outside India may generate Indian tax to the extent its value stems principally from India. In addition, arm’s length pricing for royalty payments and accompanying with- holding tax issues also come into play. Sanjay Sanghvi and Raghav Kumar Bajaj of Khaitan & Co., Mumbai and New Delhi, discuss the global tax issues surrounding the transaction.

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Extension of German Taxation on Foreign Companies Holding German Real Estate

Extension of German Taxation on Foreign Companies Holding German Real Estate

In August, the German Federal government proposed draft legislation that will expand the scope of German taxation to cover the sale of shares in “real estate rich companies” by nonresident taxpayers. The draft legislation proposes that capital gains from shares in non-German companies will be subject to German taxation if more than 50% of the share value is attributable to German real estate. The legislative proposal has wide application, reaching a shareholding that exceeds a 1% threshold at any time in the five years preceding the sale. Dr. Petra Eckl, a partner at GSK Stockmann + Kollegen in Frankfurt, explains the proposal and the practical exposure that arises from its overly broad language.

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Austrian Guidance on Taxation of Bitcoin and Other Cryptocurrencies

Austrian Guidance on Taxation of Bitcoin and Other Cryptocurrencies

While wild fluctuations in the value of Bitcoin are reported daily in global press and social media, the Austrian Ministry of Finance recently summarized its views on the tax consequences of investing in this relatively new asset class.  Niklas J.R.M. Schmidt and Eva Stadler of Wolf Theiss, Vienna, explain the real-life consequences of the transacting in virtual currencies.

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Pre-Immigration Planning: Drop-Off Trusts + Private Placement Life Insurance – If the Tools Fit, Use Them

Pre-Immigration Planning: Drop-Off Trusts + Private Placement Life Insurance – If the Tools Fit, Use Them

Wealthy persons moving to the U.S. often engage a tax adviser to craft a pre-immigration plan. Typically, the plans focus on harvesting gains, stepping up the basis in appreciated assets that cannot be sold, and simplifying structures to ensure that future gains will benefit from favorable long-term capital gains rates. However, the truly sophisticated client may wish to take a long-range approach that maximizes the accumulation of wealth during life. John F. McLaughlin and Shelly Meerovitch of Bernstein’s Wealth Planning and Analysis Group, New York, explain the benefits of forming a pre-immigration drop-off trust to invest in a private placement life insurance (“P.P.L.I.”) policy. In optimal circumstances, the P.P.L.I. investment portfolio can maximize the accumulation of wealth, provided the client obtains timely and competent legal advice in the country of residence and the U.S.  

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India Budget 2017-18

India Budget 2017-18

Provisions in Budget 2017-18 announced by the Finance Minister that relate to infrastructure, the financial sector, accountability, prudent fiscal management, and tax administration reflect a view that times are changing in India.  The government appears to remain steadfast in its efforts to bring the Indian tax and regulatory environment up to global standards.  Jairaj Purandare of JPM Advisors Pvt Ltd, Mumbai, explains the focus of the budget

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Swiss Corporate Tax Reform Postponed

Swiss Corporate Tax Reform Postponed

Through the first ten days of February, Swiss tax advisers were contemplating life after the adoption of the Corporate Tax Reform III (“C.T.R. III”). Then, the bottom dropped out from under their feet as Swiss voters defeated the tax reform package by an almost 60-40 majority.  Peter von Burg and Dr. Natalie Peter of Staiger Attorneys at Law in Zurich explain the benefits that were contemplated under C.T.R. III and ponder about what will be adopted in its place.  Switzerland must act promptly to cobble together a replacement package that will appease opponents of C.T.R. III and meet the deadline under its agreement with the E.U. for eliminating existing special benefits allowed to base companies. How much of C.T.R. III can be salvaged?

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Income Taxation of Trusts in Belgium

Income Taxation of Trusts in Belgium

How are foreign trusts, Belgian beneficiaries, and Belgian settlors taxed in Belgium when Belgian law civil law generally does not recognize the existence of trusts? Depending on facts and circumstances, the so-called Cayman Tax Law will tax either the settlor or the beneficiary.  Gerd D. Goyvaerts of Tiberghien, Brussels explains.

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News on the French Front: Tax Law Changes for Corporations and Individuals

News on the French Front: Tax Law Changes for Corporations and Individuals

In France, the enactment of new tax law provisions requires a multi-faceted procedure involving many steps carried out by the government, two houses of parliament, specialized committees, a conference of both houses of parliament, and a review by the French Constitutional Court.  Once the full procedure is completed, the new law may be effective retroactively.  Many changes in tax law were made in 2016, including the adoption of employee withholding tax, changes to the free share regime, a reduction to the corporate tax rate, extension of exemptions to the corporate tax on the payment of dividends, and the parent-subsidiary regime.  Fanny Karaman and Astrid Champion discuss these and other changes.

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French Life Insurance Policies: A U.S. Income Tax Perspective

The world of available insurance policies on an individual’s life is broad and complex within the context of only one country.  Add a foreign element, and one is faced with a legal and tax labyrinth.  Fanny Karaman and Stanley C. Ruchelman explain how a typical French life insurance policy is taxed for a policy holder having contacts with both France and the U.S.

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