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Title: Aspects of Anti-CFC rules and their relevance to Malta
Authors: Grech, Louella
Keywords: Controlled foreign corporations -- Taxation -- Law and legislation -- European Union countries
Controlled foreign corporations -- Taxation -- Law and legislation -- Malta
Fiscal policy -- Malta
Issue Date: 2009
Abstract: Globalisation has created an incredible increase in cross-border trade. Many countries have reduced barriers to the free flow of capital and investment. Against this background and parallel to this development, the world has also witnessed the proliferation of rules directed against tax avoidance and evasion as specific domestic rules designed to counteract transactions considered as abusive, such as anti-controlled foreign company (CFC) rules. The US introduced CFC rules in the early sixties (1960s) when President Kennedy wanted to create anti-avoidance legislation to eliminate the possibility of tax deferral, and lately these rules are also being introduced in European states. CFC legislation is one of the unilateral defence measures against tax evasion used by a large number of OECD member states The objective of the thesis is to discuss domestic and international tax policy and bring to the fore awareness to the problems created for companies engaged in cross-border activities by the application of a variety of country specific CFC rules, which provide a system whereby profits of a foreign resident subsidiary are taxed in the jurisdiction of the parent company before distributed thereto. Deferral of tax allows companies in particular jurisdictions to compete on equal footing with local companies and subsidiaries of other countries with lower tax burdens. However, depending on how CFC rules are designed and implemented, these rules may pose a hindrance to the free movement of capital, as companies will be faced with different tax rules depending on where their business is located.
Description: M.A.FIN.SERVICES
Appears in Collections:Dissertations - MA - FacLaw - 2009

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