COVID-19 #6 Cash repatriation – capital reduction
Next to dividend distributions and (early) repayment of intercompany loans, a group may also consider a capital reduction to repatriate cash to the upper tier structure. Whereas a reduction of fiscally paid-up capital is in principle tax neutral between corporates, it may still have some (unexpected) tax consequences. Item #6: A capital reduction is not
COVID-19 #5 Cash repatriation
Although various listed groups have already announced to refrain from distributing dividends to their shareholders, centralising cash within the group is likely marked as a high priority item on every corporate agenda. Multinational groups may currently be revisiting their cash repatriation policy / advancing dividend distributions to get ahead trapped cash issues – e.g. arising
COVID-19 #4 Sale-and-lease-back to generate cash
Over the last week, we informed you about unexpected tax cash out effects from debt waivers, pitfalls relating to capitalising companies in financial distress and tax challenges of changing financing terms. As countries are preparing for longer lockdown periods then initially anticipated, it will not come as a surprise that many companies are trying to
COVID-19 #3 The tax challenges of changes to existing financing terms
As central banks are – among other things – cutting interest rates in an attempt to limit the economic fallout from COVID-19, companies may consider refinancing older debt that still yields higher interest rates. However, such a refinancing exercise may come with unforeseen tax consequences if not properly managed. Apart from a refinancing, groups may
COVID-19 #2 Debt-equity swap to restore your equity position
In the context of the economic downturn caused by the corona crisis, companies may seek for (different) ways to restore their equity position. Previously, we explored intragroup debt waivers as a remedy to alleviate financial distress (click here). Another approach that may be considered is the contribution in kind of existing intercompany (or third party)
COVID-19 #1 Debt waiver: beware for a tax cash out
Next to having a huge impact on our personal and family lives, the outbreak and spreading of the coronavirus (COVID-19) is likely to result in a slowdown of economies across the globe. In the coming weeks, we will keep you informed on various tax (re)structuring related topics that may help you in combating the virus
Articles 442bis BITC and 93undeciesB VAT-code abolished and replaced
On 30 April 2019, a law of 13 April 2019 was published in the Belgian Official Gazette, introducing a new “Code of the amicable and enforced collection of tax and non-tax debts”. This new legislation entered into force on 1 January 2020 (Article 139 of the law).The idea behind the new code is the harmonization
Tax neutral merger possible in Belgium in case of negative accounting net equity
When a merger is performed between two Belgian legal entities whereby the acquired company has a negative accounting net equity, the question pops-up whether such merger is possible and feasible to perform tax-free. Given that Belgian law does not explicitly require a positive net equity, it can be assumed a contrario that a merger should
