The purpose of this paper is to analyze the tax treatment of dividends established in the Portuguese corporate income tax code. The tax code aims at eliminating double taxation, if certain conditions are met. However,...The purpose of this paper is to analyze the tax treatment of dividends established in the Portuguese corporate income tax code. The tax code aims at eliminating double taxation, if certain conditions are met. However, if dividends received were not previously subject to effective taxation, the elimination of double taxation no longer applies. The meaning of effective taxation is not defmed nor quantified in the code. But it is of great importance to firms＇ tax planning. In this context, it is a quite important concept, and the paper will discuss it. The methodological approach is based on using a hypothetical situation where a group of finns＇ faces different dividend flows, from diverse origins, and how taxes affect the overall tax burden of the group. The paper highlights the negative implications of a legal void in a very important tax topic regarding dividend policy in holding companies. It shows a tax induced level of uncertainty in designing dividend policy, and how it hinders financial management of groups of firms. The main conclusion is that the lack of a legal or quantitative definition of what constitutes effective taxation is an important factor of tax complexity in planning intercompany dividend policy, and the concept should be revised in legal terms.展开更多
The Inclusive Framework’s Pillar Two rules aim to create a global tax system for multinational enterprises(MNEs).They propose a global minimum tax rate for MNEs to reduce profit shifting and ensure a minimum tax on g...The Inclusive Framework’s Pillar Two rules aim to create a global tax system for multinational enterprises(MNEs).They propose a global minimum tax rate for MNEs to reduce profit shifting and ensure a minimum tax on global income.The rules have been developed over the past years in order to provide for a coordinated and multilateral approach with common standards and mechanisms to avoid double taxation.However,the rules will need to be implemented by national laws,which may differ from the Model Rules and from each other causing distortions as national legislators have to adapt these rules to their own tax systems and contexts.This article explores how double taxation could arise from the different applications of the GloBE rules by different states.展开更多
文摘The purpose of this paper is to analyze the tax treatment of dividends established in the Portuguese corporate income tax code. The tax code aims at eliminating double taxation, if certain conditions are met. However, if dividends received were not previously subject to effective taxation, the elimination of double taxation no longer applies. The meaning of effective taxation is not defmed nor quantified in the code. But it is of great importance to firms＇ tax planning. In this context, it is a quite important concept, and the paper will discuss it. The methodological approach is based on using a hypothetical situation where a group of finns＇ faces different dividend flows, from diverse origins, and how taxes affect the overall tax burden of the group. The paper highlights the negative implications of a legal void in a very important tax topic regarding dividend policy in holding companies. It shows a tax induced level of uncertainty in designing dividend policy, and how it hinders financial management of groups of firms. The main conclusion is that the lack of a legal or quantitative definition of what constitutes effective taxation is an important factor of tax complexity in planning intercompany dividend policy, and the concept should be revised in legal terms.
文摘The Inclusive Framework’s Pillar Two rules aim to create a global tax system for multinational enterprises(MNEs).They propose a global minimum tax rate for MNEs to reduce profit shifting and ensure a minimum tax on global income.The rules have been developed over the past years in order to provide for a coordinated and multilateral approach with common standards and mechanisms to avoid double taxation.However,the rules will need to be implemented by national laws,which may differ from the Model Rules and from each other causing distortions as national legislators have to adapt these rules to their own tax systems and contexts.This article explores how double taxation could arise from the different applications of the GloBE rules by different states.
