Members' Area

Tax Issues - Holding Regimes

European Holding Companies
Operating in the global market place requires a knowledge of the local business environment and the tax laws combined with an overview of how these differing local legal / tax systems interact at an international level. The incorporation of a foreign holding company to own overseas subsidiaries is a common tax planning strategy for many groups operating internationally. With the expansion of the European Union and the introduction of EU wide laws such as the Parent - Subsidiary Directive; Mergers Directive and the Interest & Royalties Directive combined with the domestic laws of the countries concerned, various European jurisdictions offer interesting and varied opportunities for the operation of an international or domestic holding company.

The use of a holding company can assist in minimizing or eliminating the incidence of withholding tax on dividend, interest or royalty income flows; the exemption from taxation on dividend income at the level of the parent company and the exemption, mitigation or deferral of taxation on capital gains within a group arising out of a merger, re-organisation, intra-group asset sale and capital restructuring amongst other objectives.

The choice of a jurisdiction for a holding company depends on various tax and non-tax related considerations. At Nexia we have the right combination of local tax advisors who have an extensive knowledge of the jurisdiction tax rules who together with a dedicated specialist group of international tax advisors experienced in international holding companies are in a position to evaluate the key issues necessitating the use of a holding company and which may effect your tax exposure worldwide.

The experience of the specialist team is also brought together in a Nexia publication which analyses 15 key European Holding Company jurisdictions across the various tax & non-tax related considerations. This publication is available on request, at the discretion of Nexia.

If you would like to know more about our services, contact your local Nexia International office or the Nexia International Holding Company Task Force: