Kapitaleinziehung

13:55 Apr 11, 2007 

There is a connection to Germany through the other individual and corporate shareholders in corporations that are related to the Lux corporations. So capital repayment is the best translation.

13:17 Apr 5, 2007 

Sorry, but I'm confused again. If the seller is Swiss, and the corporation is Lux, where's the connection with Germany (AStG)? I would have gone for "capital repayment", but I'm not so sure any more. I'm pretty sure it's not "retirement" (cancellation).

12:53 Apr 5, 2007 

The seller is listed as a Swiss national in the share register of the corporation. I think the corporation is a Luxembourg company. Don't know if the seller moved from somewhere else.

12:33 Apr 5, 2007 

OK, I think we're getting there, slowly. Tax is *always* complicated. One final question: do you know where the seller (AE) is resident? Germany or CH. If CH, can you tell from the text if he's German, and when he moved to CH?

12:25 Apr 5, 2007 

Mr. AE is selling his shares in a Swiss company as part of a deal involving the formation of two separate trusts in Bermuda, one for each of his heirs. The source text is a memo by a Swiss attorney (my apologies for leaving that out) recording a meeting in which attorneys for all the shareholders discussed how best to structure the share sale with regard to taxes and other considerations. The paragraph I posted with the question is from a section in which they go through the alternatives to selling the shares through a normal sale. They seem to be rejecting the idea described in that paragraph because of the Aussensteuer consequences:

Als weitere Möglichkeiten wurden in Betracht gezogen:
- Verpfändung der Beteiligungserträge ggfls. in der Höhe der Annuität an Dr. AE


- unwiderrufliche Anweisung des Käufers an die Gesellschaften, die Annuität direkt an Dr. AE auszuzahlen (soweit ausreichende Dividenden beschlossen wurden.)
Is this option perhaps what he’s referring to when he says “Aufnahme eines Kredits durch den Käufer bei einer der Gesellschaften”?

[…]
the posted paragraph

08:12 Apr 5, 2007 

Especially the reference to the Außensteuergesetz would suggest a link to the German CFC rules (Hinzurechnungsbesteuerung) governing thin cap, but again it's impossible to say without knowing more about who's investing in whom. Please give us more info!

08:07 Apr 5, 2007 

"Kapitaleinziehung" is not a standard German tax term of art. This has clearly got to do with thin cap rules, probably either recourse loans or back-to-back financing, but it's difficult to say exactly without more context.