Monday, June 14, 2010

New EU anti-abuse rules?

This may be important:

"The Council is expected to adopt a Resolution on coordination of the controlled foreign corporation (CFC) and thin capitalisation rules within the European Union. The European Commission welcomes the initiative as a good example of how a coordinated approach of EU Member States can bring tangible results on very complex and sensitive tax issues. The draft Resolution will provide a better understanding of the concept of "wholly artificial arrangements" in the direct tax field. It will also provide information to stakeholders as to how EU Member States wish to ensure that their CFC and thin capitalisation rules comply with the Treaty obligations and protect their tax bases from undue erosion due to aggressive tax planning."

Let's hope that this non-binding resolution will establish criteria which will allow the likes of Luxembourg to be targeted by Controlled Foreign Corporation rules by EU-member states. If not, one might wonder what would be the point.

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