The company asked whether tax authorities would be entitled to estimate an arm’s length remuneration for the shares if the remuneration differs from the market or nominal value of the shares.
The tax authority held that it will be entitled to estimate the company’s income realised upon the voluntary redemption of shares. The tax authority pointed out that as of 2011 a remuneration received upon voluntary redemption is not treated as a ‘dividend income’ (art. 10 of the CIT Act), but as an income taxed on general rules (art. 12 of the CIT Act).
Discover more: Remuneration for voluntary redemption of shares may be determined freely
For similar content to our Global Guide, subscribe to our mailing list and keep up to date.
Owners and investors of holding companies have gained another argument to claim that tax authorities should not challenge the amount of revenue recognised by the them in the case of voluntary redemption of shares.
