1. ESC-Dijon- Pole Finance – EU Tax – A. Ashta
EU Taxation
10. Capital Duties
Arvind Ashta
Introduction
Place of Taxation
Capital Company
Transactions subject to tax
Tax base
Tax Rates
Exemptions
Prohibitions and allowances
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

2. ESC-Dijon- Pole Finance – EU Tax – A. Ashta
Introduction
Indirect Taxation
Harmonization
Promotes free movement of capital
Abolish stamp duties on securities
Abolish other similar indirect taxes
Limit duty on capital to once
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

3. ESC-Dijon- Pole Finance – EU Tax – A. Ashta
Place of Taxation
Effective Centre of Management (real seat)
Registered Office (statutory seat)
Branch
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

4. ESC-Dijon- Pole Finance – EU Tax – A. Ashta
Capital Company
For all States
Companies listed under article 3 (1)
Shares can be dealt in stock exchange
Can freely transfer shares and limited liability
On option for Member-States:
Implcit: Any other form of enterprise, working for a profit
Member State has to opt out explicitly
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

5. Basis of Assessment: Compulsory
Formation of a capital company;
Conversion into a capital company
Increase in the capital of a capital company
Shares
Rights similar to shares
Transfer from a third country to a Member
Effective centre of management
Registered office
Transfer from one Member State to another
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

6. Basis of Assessment: Optional
Capitalisation of profits or reserves
Services rendered in kind by a member
A loan taken, if creditor gets share in profits
Loan from Member or his family if it increases capital
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

7. Exclusions from tax-base
Compulsory
Assets or loans which have already been taxed
Optional
Contribution by members with unlimited liability
But in this case, must tax this if
Seat transferred to another Member State which does not do this
If liability becomes limited
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

8. ESC-Dijon- Pole Finance – EU Tax – A. Ashta
Rates
See tax rates before
Transactions taxed less than 0.5% now exempted
Other Transactions can be exempted or taxed maximum 1%.
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

9. Exemptions (all optional)
Capital raised to absorb losses
Public services: State owns at least 50%
Cultural, charitable, relief, educational objectives
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

10. ESC-Dijon- Pole Finance – EU Tax – A. Ashta
Prohibitions
No similar taxes
No taxes on registration or pre-incorporation
No taxes on introduction of shares on stock exchange
No taxes on capital raised through loans, debentures
ESC-Dijon- Pole Finance – EU Tax – A. Ashta

11. ESC-Dijon- Pole Finance – EU Tax – A. Ashta
Allowances
duties on the transfer of securities,
duties on the transfer of businesses or immovable property
duties on assets transferred for a consideration other than shares in the company
duties on the creation, registration or discharge of mortgages or other charges on land or other property
duties paid by way of fees or dues
value added tax
ESC-Dijon- Pole Finance – EU Tax – A. Ashta