Abstract
The current, extremely volatile financial and economic environment poses many challenges to most taxpayers. Dealing with external funding may be one of these challenges, also because funding from third parties has become much stricter and seldom in the form of pure debt capital, i.e. loans, and of pure equity capital, i.e. ordinary shares. Rather, and also due to a variety of other non-tax reasons, instruments for finance and investment have become numerous and more complex, mostly combining elements of both worlds, the so-called hybrid financial instruments. Their spectrum ranges from shares with features typical for loans (e.g. redeemable preference shares) to loans with features typical of ordinary shares (e.g. profit-participating loans). Together with the increasing globalization of the world economy, financial markets have undergone a process of internationalization. The increasing integration between financial markets, and the resulting opening to cross-border capital flows, are illustrated in a constant increase of the number of and in the level of sophistication in the structuring of cross-border financial transactions. They are accompanied by, as well as made possible due to, institutional developments, e.g. deregulation, and by diversifications in market participants, e.g. participants of cross-border mergers and acquisitions.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
References
Abbey P (2004) Aspects of the debt and equity tests. J Aust Tax 72–93
Avery Jones JF et al (2009) The definitions of dividends and interest in the OECD model: something lost in translation?, World Tax J 5–45
Benshalom I (2010) How to live with a tax code with which you disagree? Doctrine, optimal tax, common sense and the debt and equity distinction. N C Law Rev 1217–1274
Blessing PH (2012) The debt-equity conundrum – a prequel. Bullr Int Tax 198–212
Bogenschütz E (2008a) Hybride Finanzierungen im grenzüberschreitenden Kontext. Die Unternehmensbesteuerung 533–543
Bourke GG (2004) Drawing a sharp line in the sand of the debt/equity desert – division 974 – oasis or mirage?. Aust Tax Rev 24–58
Brandsma RPCWM (2003b) Hybride leningen (verstrekt aan lichamen). Deventer
Briesemeister S (2006) Hybride Finanzinstrumente im Ertragsteuerrecht, Düsseldorf
Bundgaard J (2010a) Classification and treatment of hybrid financial instruments and income derived therefrom under EU corporate tax directives – part 1. Eur Tax 442–456
Bundgaard J (2010b), Classification and treatment of hybrid financial instruments and income derived therefrom under EU corporate tax directives – part 2. Eur Tax 490–500
Code of Conduct Subgroup (2010) Report of the code of conduct (business taxation) subgroup, 12.5.2010, Council document 9779/10 FISC 43. http://register.consilium.europa.eu/pdf/en/10/st09/st09779.en10.pdf. Accessed 3 Jan 2012
Cooper GS (2003) The debt-equity distinction in Australian tax law. Bull Int Tax 338–345
De Mooij RA, Devereux MP (2011) An applied analysis of ACE and CBIT reforms in the EU. Int Tax Public Financ 93–120
Duncan JA (2000) General report. In: IFA (ed) Tax treatment of hybrid financial instruments in cross-border transactions, vol 85a. The Hague, pp 21–34
Eberhartinger E, Six M (2007) National tax policy, the directives and hybrid finance. In: Andersson K, Eberhartinger E, Oxelheim L (eds) National tax policy in Europe. Berlin/Heidelberg, pp 213–236
Eberhartinger E, Six M (2009) Taxation of cross-border hybrid finance: a legal analysis. Intertax 4–18
Haun J (1996) Hybride Finanzierungsinstrumente im deutschen und US-amerikanischen Steuerrecht. Frankfurt am Main
Helminen M (2000) Dividend equivalent benefits and the concept of profit distribution of the EC Parent-Subsidiary Directive. EC Tax Rev 161–171
Jansen E, van Kasteren E (2008) Hybrid financial instruments. Deriv Financ Instrum 175–188
Krause H (2006) Die Besteuerung hybrider Finanzinstrumente. Frankfurt am ain
Lang M (1991) Hybride Finanzierungen im Internationalen Steuerrecht. Vienna
Lühn M (2006a) Bilanzierung und Besteuerung von Genussrechten. Wiesbaden
Monti M (2010) A new strategy for the single market. Report to the president of the European commission José Manuel Barroso, Bruxelles
OECD (2012) Hybrid mismatch arrangements. Paris
Pijl H (2011) Interest from hybrid debts in tax treaties. Bull Int Tax 482–502
Rotondaro C (2000) The right to redemption as a key characterization factor in the OECD model convention passive income taxation system – the case of reverse convertibles. Deriv Financ Instrum 258–271
Schön W et al (2009) Debt and equity: what’s the difference? A comparative view, Max Planck Institute for intellectual property, competition & tax law research paper no. 09-09, pp 1–95
Schuch J (2004) Hybride Finanzierungen im Recht der Doppelbesteuerungsabkommen. In: Bertl R et al (eds) Eigenkapital – Finanzierung, Basel II, Bilanzierung, Besteuerung, Reporting. Vienna, pp 217–237
Serbini S, Flora P (2005) Equity and debt instruments: the new definition in the tax reform and the tax consequences. Eur Tax 19–24
Six M (2008) Hybride Finanzierung im Internationalen Steuerrecht am Beispiel von Genussrechten. Vienna
Six M (2009) Hybrid finance and double taxation treaties. Bull Int Tax 22–25
Van Strien J (2006) Renteaftrekbeperkingen in de vennootschapsbelasting. Deventer
Wood R (1999) The taxation of debt, equity, and hybrid arrangements. Can Tax J 49–80
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2012 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Bärsch, SE. (2012). Introduction. In: Taxation of Hybrid Financial Instruments and the Remuneration Derived Therefrom in an International and Cross-border Context. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-32457-4_1
Download citation
DOI: https://doi.org/10.1007/978-3-642-32457-4_1
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-32456-7
Online ISBN: 978-3-642-32457-4
eBook Packages: Business and EconomicsBusiness and Management (R0)