BVS Seminar Draft Law / Royal Decree changing SIR regulatory framework aspects & practical examples Michael Van Gils Partner Deloitte 16 June 2016
Proposed changes to tax regime / SIR (also valid for GVBF / FIIS) No longer (taxable) deemed liquidation in case of conversion into (I) / SIR(I) Exit tax 16.995% also applicable in case of a contribution of a universality or a branch of activity, or in case of contribution in kind exclusively remunerated through shares neutrality in case of reorganizations (e.g. merger, demerger, ) if all parties concerned are SIRs / s (or GVBF / FIIS) Dividend distribution to corporate shareholder: DRD possible to the extent that distributed dividends stem from real estate income taxed abroad, or from dividends from normally taxed companies assuming / SIR respects distribution obligation.
Case 1: PPP cooperation with During start-up phase can participate < 25%, if participation > 25% within 2 years after termination of construction Private partner 1 Sale < 2 year ( ) 65% Private partner 2 25% 10% PPP - co as guarantor who guarantees a PPP offer Government PPP co subject to normal taxation Capital gains PP 1 no or very limited taxation (0.412%) Dividends to PP 2: DRD regime ( ) after construction
Case 2: PPP cooperation with, through I PPP co transformed into I Private partner 2 Exit tax 16.995% on capital gains 25% I no taxation, except for disallowed expenses / abnormal advantages 75% PPP co I Government Thin cap limitation PPP co I, to the extent of debt from à incl in tax basis Dividends to PP 2: taxation 33,99% (if Belco) Future capital gains PP 2: taxation 33,99% (if Belco)
Case 3: Corporate real estate joint venture Corporate Group Corporate contributes strategic real estate in JV - co (I), and sale of minority participation to (deleveraging operation) 40% 60% JV - co I Corporate maintains control, but benefits from RE expertise of the / SIR No trapped cash Exit tax 16.995% on capital gains contribution in kind Attention for mixed contributions (registr. duties) I no taxation, except for disallowed expenses / abnormal advantages Dividends to Corporate Group: Belco: taxation 33,99% Non Belco: Double treaty + local taxation
Case 3: Termination corporate real estate joint venture Corporate re-acquires 100% Corporate Group Parties can make prior price agreements 100% JV co loses I statute and retransforms into normal corporation 40% Quid: Momentum? JV - co I Fiscally paid-in capital? ed reserves? Fiscal valuation assets?
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