International Accountants Consortium

Holding structures

The result of the inquiry on the holding companies, even if not complete, as shown that in almost all countries there are fiscal rules that allow some advantages to companies with a holding status (which usually must be specified in the by-laws).

Where these rules apply, some criteria must be fulfilled:

• duration of holding period;

• minimum participation in the subsiadiary company;

• thin capitalization rules.

In most countries, the income derived from the participation is either exempted or reduced from normal taxation. This is also the result of the EC parent-subsidiary resolution. In some contries it is also possible to arrange a specific tax ruling for the holding companies, which further reduces the burden of taxes on profits.

In a holding structure, variuos aspects relate to problems with transfer pricing rules, such as management fees, thin capitalization and others.

A must, before establishing a holding company, is also verifying the network of double tax treaties of the country of residence of the holding company.