Tax Planning for U.S. Investors

FACULTY OF LAW
Lund University

Sabina Örberg

Tax Planning with Holding Companies for US
Investors in Europe
A Comparative Study of Holding Regimes in Sweden and Switzerland

JAEM03 Master Thesis
European Business Law
30 higher education credits

Supervisor: Mats Tjernberg
Term: Spring 2013

Contents
SUMMARY

1

SAMMANFATTNING

2

PREFACE

3

ABBREVIATIONS

4

1

5

INTRODUCTION
1.1 Background
1.2 Purpose

7

1.3 Method and Material

7

1.4 Delimitations

9

1.5 Terminology

9

1.6 Disposition
2

5

10

HOLDING COMPANIES - CHARACTERISTICS AND CONCEPTS

12

2.1 Key Elements of Holding Companies

12

2.2 Use of Holding Companies

12

2.3 Risks of Holding Companies

14

2.4 Legal Forms

14

2.4.1 Corporation

14

2.4.2 Partnership

15

2.4.3 Foundation

16

2.4.4 Permanent Establishment as Holding

16

2.4.5 European Company (Societas Europaea)

16

2.5 Functional Classification

17

2.5.1 Management Holding Company

17

2.5.2 Finance Holding Company

17

2.5.3 Euro-Holding Company

18

2.5.4 Country Holding Company

19

2.5.5 Mixed Holding Company

19

2.6 Concluding Remarks
3

19

TAX PLANNING WITH HOLDING COMPANIES

20

3.1 Features of a Holding Company Jurisdiction

20

3.2 The Tax Planning Model

22

3.2.1 Benchmarking

22

3.2.2 Analysis

23

3.2.3 Strategy

23

3.2.4 Implementation

24

3.2.5 Compliance

24

3.3 Tax Planning Tools

24

3.3.1 Participation Exemption Shopping

24

3.3.2 Capital Gains Exemption Shopping

24

3.3.3 Treaty Shopping

25

3.3.4 Treaty Exemption Shopping/Deferral Shopping

26

3.3.5 Credit Mix Shopping

26

3.3.6 Rule Shopping

26

3.3.7 Deduction Shopping

27

3.3.8 Cross-border Group Relief Shopping

27

3.3.9 Tax Rate Shopping

28

3.4 Concluding Remarks
4 TAX HAVENS AND TAX COMPETITION

28
29

4.1 Characteristics of Tax

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