Double Taxation Treaties
Double taxation treaties govern the allocation of taxing rights between the participating states. In particular, they can influence the taxation of dividends, interest, royalties, capital gains, and corporate profits.
However, the existence of a double taxation treaty does not automatically result in the application of a reduced tax rate or a tax exemption. Considerations include, among other things, the tax residency of the income recipient, their status as the ultimate beneficial owner of the income, the economic purpose of the structure, the existing substance, and specific limitations of the applicable treaty.
The provisions of a double taxation treaty should therefore be examined prior to conducting a cross-border transaction or income payment.
International Intercompany Transactions
Transactions between related enterprises must comply with the arm's length principle. This applies in particular to intercompany loans, management services, the transfer of intellectual property, the allocation of shared costs, and deliveries of goods between companies of the same group.
Non-arm's-length pricing or insufficient economic justification can lead to taxable profit adjustments, additional tax assessments, default interest, and penalties.
An international tax structure must therefore consider not only payment flows, but also the actual distribution of functions, assets, and risks within the corporate group.
International Tax Planning with Jost & Partners
Jost & Partners supports entrepreneurs, investors, and internationally active companies in developing and reviewing cross-border corporate and asset structures.
Our work may include in particular:
- Analysis of existing corporate and asset structures;
- Assessment of the tax implications of planned transactions and restructurings;
- Analysis of the tax residency of companies and the place of effective management;
- Development of international holding, investment, and financing structures;
- Examination of the applicability of double taxation treaties;
- Assessment of withholding taxes on dividends, interest, and royalties;
- Consideration of economic substance requirements;
- Analysis of intercompany financing and other transactions between related enterprises;
- Support during international mergers, corporate acquisitions, and restructurings;
- Coordination of corporate and contractual documentation drafting;
- Collaboration with local tax advisors, auditors, and additional specialists in the relevant jurisdictions.
We consider tax issues in the context of the corporate structure, the movement of assets, banking requirements, and the company's actual business model.
Where an official opinion on domestic tax law, the preparation of a tax return, obtaining a tax ruling, or representation before local tax authorities is required, our international tax advisory work is coordinated with specialized counsel in the respective jurisdiction.
The objective of our advice is to develop a transparent and practically workable structure that reflects the client’s commercial plans, reduces the risk of double taxation and complies with the legal requirements of the jurisdictions involved.
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