TAX INCENTIVES FOR PRIVATE INVESTMENT IN DEVELOPING COUNTRIES

Transcription

1 TAX INCENTIVES FOR PRIVATE INVESTMENT IN DEVELOPING COUNTRIES

2 INTERNATIONAL BAR ASSOCIATION Tax Committee, Section on Business Law TAX INCENTIVES FOR PRIVATE INVESTMENT IN DEVELOPING COUNTRIES Reporter: Robert Anthoine Partner of Winthrop, Stimson, Putnam & Roberts Adjunct Professor of Law, Columbia University 1979 Springer-Science+Business Media, B.V.

3 Cover design: Pieter J. van der Sman Library of Congress Cataloging in Publication Data Main entry under title: Tax incentives for private investment in developin,g countries. At head of title: International Bar Association. 1. Underdeveloped areas - Taxation - Addresses, essays, lectures. 2. Underdeveloped areas - Investments, Foreign - Law and legislation - Addresses, essays, lectures. I. Anthoine, &obert. II. Internaltional Bar Association. K4528.Z9T '09172' ISBN ISBN (ebook) DOI / Springer Science+ Business Media Dordrecht Originally published by Kluwer, Deventer, The Netherlands 1979 Softcover reprint of the hardcover 1st edition 1979 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the written permission of the publisher.

4 Table of Contents About the IBA Section on Business Law. Chairman's Page Preface by the Chairman of the Tax Committee. Editor's Preface. Statement of Reporter, Robert Ant/wine Statements of Developed Countries Australia by Kevin J. Edwards. Austria by Dr. Heinz H. Lober. Belgium by Dr. R. D. de Broglio Canada by James Scott Peterson and Robert Anthoine. Denmark by Svend Oppenhejm. France by J. C. Goldsmith Federal Republic of Germany by Reinhard Poellath Italy by Giuseppe Bisconti and Bruno Gangemi Japan by Gary M. Thomas. Netherlands by A. Hartman. Sweden by Sten Sandell and Torbjorn Skold Switzerland by Dr. Robert Briner. United Kingdom by Peter M. B. Rowland United States of America by Robert Anthoine Summary of Other Developed Country Laws Finland. Ireland. New Zealand Norway.. South Africa Statements of Developing Countries Argentina by Pedro de Elizalde Brazil by J. F. Gouvea Vieira. Greece by George Stathopoulos Guatemala by Sergio Garcia Granados India by Vasant P. Mehta. Morocco by Seddik Zaari.. Spain by Dr. Bernardo Ma Cremades Yugoslavia by Miodrag P. Popovic. VII IX XI XIII v

5 About the ffia Section on Business Law The Section on Business Law was formed in 1970 to promote an interchange of information among Members as to laws, practices and procedures affecting business, financial and commercial activities throughout the world. It works through the following 20 Committees: (A) Maritime and transport law {B) Aeronauticallaw {C) Antitrust law and monopolies (D) Procedures for settling disputes (E) Commercial banking (F) Environmentallaw (G) Business organizations (H) Insurance (I) Investment companies funds and trusts (J) Creditors' rights, insolvency, liquidations and reorganizations (K) Public utilities (L) Patents, trademarks, copyrights (M) Sales of goods (N) Taxes (0) Energy and natural resources (P) Labour law (0) Issues and trading in securities (S) Consumer affairs, advertising, unfair competition and products liability (T) International construction contracts (U) Savings and building societies The Section publishes the International Business Lawyer and arranges Conferences and Seminars. Membership enables lawyers to make contact with others practising in the same fields and to contribute to law reforms of direct interest to the practising lawyer. Further details of the Section and how to join may be obtained from the ma, Byron House, 7-9 StJames's Street, London SWlA lee, England. vn

6 Chairman's page 'Tax Incentives for Private Investment in Developing Countries' are an important aspect of the so-called North-South Dialogue and the transfer of technology from industrial countries to developing countries. The Section on Business Law of the International Bar Association is greatly indebted to the Editor, Robert Anthoine, the Chairman of the Committee on Taxes, Jean-Claude Goldsmith, its Vice-Chairmen, John H. Young and Raoul Lenz, and the members of the Committee, Who have contributed, for their joint efforts in preparing this first book of the Committee on Taxes. It has been written by practising lawyers with the knowledge and experience of their own daily work but also with the knowledge of what a practitioner is looking for. I am confident that this book will prove of real assistance to practising lawyers world-wide, as did previous publications of other Committees of the Section on Business Law. I wish it full succes. I hope that you may wish to join the Section on Business Law and thereby make contact and work with lawyers with similar interests in commercial law. Dr. Walter Oppenhoff Chairman of the Section on Business Law IX

7 Preface by the Chairman of the Tax Committee Dear friends and colleagues, Our Committee is now in its ninth year of existence since it was formed, concurrently with the Business Section as a whole, at the IBA Congress in Tokyo in A number of topics have since been selected for their highly practical implications, and considered and discussed at the Committee meetings. A good number of them were covered by reports in writing which were published in The International Business Lawyer or in Tax Management. Others were presented and surveyed in the form of a panel-floor exchange of views on the seminar model. Until now, none have resulted in the publication of a full book. The main reason is that it is not very easy to achieve the harmonization and editing of national reports in a single language, even on the basis of a specific and detailed questionnaire. This gap is now filled up by the issue of two books published by Kluwer Law and Taxation Publishers, one on 'Tax Incentives for Private Investment in Developing Countries' and the other on 'Tax Status of Regional Headquarters of Multinational Companies'. It is my personal pleasure and pride to introduce the book on tax incentives, indeed a most important subject in international business. I hope it may prove to be a useful companion in your practice. I look forward to our next meeting in Zurich. With my best regards, Yours sincerely J. C. Goldsmith Chairman-Committee 'N' : 'Taxes' Section on Business Law XI

8 Editor's Preface The purpose of this book is to provide within a single volume a comparative analysis of the tax laws of developed countries bearing upon direct private investment in developing countries, and a representative sample of developing country laws bearing upon the receipt of such investment. This study was initiated by the Tax Committee of the Business Section of the International Bar Association under the leadership of Jean-Claude Goldsmith of the Paris Bar. I undertook to act as the reporter, to browbeat colleagues in other countries to write national reports, and to provide the reporter's overview statement. This report includes studies of fourteen developed countries prepared by national reporters and summaries of five other developed country laws. Noteworthy are the detailed examinations of the laws of the Federal Republic of Germany and of Japan, the two developed countries that have provided the most comprehensive system of incentives for private investment in developing countries. Also contained herein are reports from eight developing countries, including a thorough examination of the laws of Brazil. Attention is paid in the developed country reports not only to those tax provisions that act as in inducement to foreign investment but also to those that favor domestic investment and hence act as a disincentive to foreign investment. Relevant double taxation agreements are discussed, and other aspects such as exchange control and government grants are also mentioned. I am grateful to the national reporters who took the time from their busy practices to prepare reports which en masse provide an excellent view of the current state of tax incentives for private investment in developing countries. New York, New York May, 1979 Robert Anthoine XIII