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Tax on Inbound Investment in 33 Jurisdictions Worldwide

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Tax on Inbound Investment in 33 Jurisdictions Worldwide ® Tax on Inbound Investment in 33 jurisdictions worldwide Contributing editors: Peter Maher and Lew Steinberg 2012 Published by Getting the Deal Through in association with: A&L Goodbody Abraham & Co (Solicitors, Advocates and Notary Public) ADMD Law Firm Anzola Robles & Associates Berwin Leighton Paisner LLP BLP Abogados BMR Advisors Boga & Associates Borden Ladner Gervais LLP Carey y Cía CMS Bureau Francis Lefebvre CMS Hasche Sigle CMS Reich-Rohrwig Hainz CMS Reich-Rohrwig Hainz doo Doria, Jacobina, Rosado e Gondinho Advogados Associados Hoet Pelaez Castillo & Duque Iason Skouzos & Partners Law Firm Juridicon Law Firm KPMG LLP Kromann Reumert Mallesons Stephen Jaques MMLC Group Molitor Avocats à la Cour Nagashima Ohno & Tsunematsu Poledna Boss Kurer AG Posse, Herrera & Ruiz Abogados Raidla Lejins & Norcous Salaberren & López Sansón Salans Skeppsbron Skatt AB Spigthoff Advocaten & Belastingadviseurs (Curaçao) NV Tron Abogados, SC Vieira de Almeida & Associados CONTENTS ® Tax on Inbound Albania Alketa Uruçi and Jonida Skendaj Boga & Associates 3 Investment 2012 Argentina Sebastián López–Sansón and Fernando Esteban Morera-Martínez Contributing editors: Salaberren & López Sansón 6 Peter Maher, A&L Goodbody Lew Steinberg, Credit Suisse Australia Richard Snowden and Cory Hillier Mallesons Stephen Jaques 9 Business development managers Brazil Rodrigo Jacobina Doria, Jacobina, Rosado e Gondinho Advogados Associados 16 Alan Lee George Ingledew Robyn Hetherington Canada Stephanie Wong and Richard Eisenbraun Borden Ladner Gervais LLP 21 Dan White Chile Jaime Carey and Manuel José Alcalde Carey y Cía 28 Marketing managers Ellie Notley China Matthew Murphy and Yu Du MMLC Group 32 Sarah Walsh Alice Hazard Colombia Juan Guillermo Ruiz Posse, Herrera & Ruiz Abogados 36 Costa Rica Alonso Arroyo, Randall Madriz and Vittoria Di Gioacchino BLP Abogados 40 Marketing assistants William Bentley Sarah Savage Croatia Wolfgang Auf CMS Reich-Rohrwig Hainz 44 Curaçao Xandra M Kleine-van Dijk and Jeroen Starreveld Business development manager (subscriptions) Spigthoff Advocaten & Belastingadviseurs (Curaçao) NV 49 Nadine Radcliffe Subscriptions@ Denmark Arne Møllin Ottosen and Michael Nørremark Kromann Reumert 54 GettingTheDealThrough.com France Michel Collet and Xenia Lordkipanidzé CMS Bureau Francis Lefebvre 59 Assistant editor Germany Wolf-Georg von Rechenberg CMS Hasche Sigle 65 Adam Myers Editorial assistant Greece Theodoros Skouzos Iason Skouzos & Partners Law Firm 69 Lydia Gerges India Mukesh Butani and Shefali Goradia BMR Advisors 74 Senior production editor Jonathan Cowie Ireland Peter Maher and Philip McQueston A&L Goodbody 80 Chief subeditor Jonathan Allen Japan Yushi Hegawa Nagashima Ohno & Tsunematsu 84 Subeditors Latvia Sandija Novicka and Elina Bedanova Raidla Lejins & Norcous 89 Martin Forrest Davet Hyland Lithuania Laimonas Marcinkevicˇius and Ingrida Steponavicˇiene˙ Juridicon Law Firm 93 Caroline Rawson Sarah Morgan Luxembourg Olivier Gaston-Braud Molitor Avocats à la Cour 99 Editor-in-chief Mexico Manuel E Tron and Elías Adam Tron Abogados, SC 103 Callum Campbell Nigeria Lolade Ososami Abraham & Co (Solicitors, Advocates and Notary Public) 108 Publisher Richard Davey Panama Ramon Anzola and Maricarmen Plata Anzola Robles & Associates 112 Tax on Inbound Investment 2012 Portugal Tiago Marreiros Moreira, Conceição Gamito and Frederico Antas Published by Vieira de Almeida & Associados 120 Law Business Research Ltd 87 Lancaster Road London, W11 1QQ, UK Russia Boris Bruk Salans 126 Tel: +44 20 7908 1188 Fax: +44 20 7229 6910 Slovenia Wolfgang Auf CMS Reich-Rohrwig Hainz doo 131 © Law Business Research Ltd 2011 Sweden Niklas Bång, Maria Norlin and Carin Gerding Skeppsbron Skatt AB 135 No photocopying: copyright licences do not apply. Switzerland Walter H Boss and Stefanie M Monge Poledna Boss Kurer AG 140 ISSN 1753-108X Turkey Orhan Yavuz Maviog˘lu ADMD Law Firm 144 The information provided in this publication is general and may not apply in a specific United Kingdom Gary Richards and Aude Delechat Berwin Leighton Paisner LLP 147 situation. Legal advice should always be sought before taking any legal action United States Christian J Athanasoulas, Jason R Connery and Jennifer Blasdel-Marinescu based on the information provided. This information is not intended to create, nor KPMG LLP 152 does receipt of it constitute, a lawyer–client relationship. The publishers and authors Venezuela Francisco Castillo-García and Raul Stolk Hoet Pelaez Castillo & Duque 158 accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of October 2011, be advised that this is a developing area. Printed and distributed by Encompass Print Solutions Tel: 0844 2480 112 Law Business Research Juridicon Law Firm LITHUANIA Lithuania Laimonas Marcinkevicˇius and Ingrida Steponavicˇiene˙ Juridicon Law Firm Acquisitions (from the buyer’s perspective) of a Lithuanian company does not have to pay any taxes related to the ownership itself. 1 Tax treatment of different acquisitions Finally, a transaction concerning a sale or purchase of stock does What are the differences in tax treatment between an acquisition not need to be certified by a notary, but the transfer of a whole or of stock in a company and the acquisition of business assets and a part of business as a complex unit of rights and obligations must liabilities? be. Regarding tax on corporate income, the acquisition of stock as such usually does not influence the balance of the profit and loss of the 2 Step-up in basis Lithuanian company being acquired. However, under specific condi- In what circumstances does a purchaser get a step-up in basis in tions Lithuanian tax laws allow transfer of all or a part of losses for the business assets of the target company? Can goodwill and other 2010 and subsequent years within the group of legal entities, includ- intangibles be depreciated for tax purposes in the event of the ing the cross-border transfers. On the other hand, an acquisition of purchase of those assets, and the purchase of stock in a company stock or an acquisition of business assets will affect the balance of the owning those assets? acquirer. Moreover, in an acquisition of a separate unit of property, rights or obligations, and subject to further activities in Lithuania, the The purchaser may get a step-up in basis if the business assets of the acquirer may be recognised as acting through its permanent estab- company are purchased or exchanged for other property. lishment in Lithuania, which may lead to the taxation of income of Under the Law on CIT, the income of a Lithuanian or foreign that activity in Lithuania. entity through its permanent establishment in Lithuania, received The taxation of profit from further sales of purchased prop- from the increase in the value of assets resulting from transfer of erty differs as well. Profit on the sale of shares received by an shares of a target entity, shall not be taxed in Lithuania in the event acquirer with no other presence in Lithuania is not subject to tax that: on corporate income, but the sales of separate units of assets and • the target entity is registered or otherwise organised in a state of liabilities might be. For example, subject to the Law on Corporate the European Economic Area (EEA) or in a state with which a Income Tax (the Law on CIT), profit from the sale of real property treaty for the avoidance of double taxation is in force; the target located in Lithuania is subject to a 15 per cent tax on corporate entity is a payer of corporate income tax or an equivalent tax; income. the entity transferring the shares held more than 25 per cent of The above-mentioned two forms of acquisition differ with voting shares in the target entity for an uninterrupted period of respect to VAT. Pursuant to the Law on Value Added Tax (the Law at least two years; and the entity transferring the shares does not on VAT) the sale-purchase of stock is not subject to VAT in Lithua- transfer them to the entity that has issued these shares; or nia, even if the company whose stock is being purchased owns the • the shares of a target entity are transferred during the specific real property. From 1 January 2010 the transfer of whole or a part types of reorganisation referred to in the Law of CIT; the trans- of business, as a complex unit of rights and obligations (from 1 Janu- ferring entity held more than 25 per cent of voting shares in the ary 2011 including cases where whole or a part of business, as a target entity for an uninterrupted period of at least three years; complex, is transferred as a contribution of a member of the legal and the entity transferring the shares does not transfer them to person), to the taxable person who continues the acquired activity, the entity that has issued these shares. is also not subject to VAT. According to the currently valid laws, the transfer of property during a reorganisation where the transferor is In accordance with the Law on CIT, the acquisition price of assets being dissolved may be subject to VAT: if the purchase or import comprises expenses incurred for acquiring the assets, including com- VAT from a particular property or business activity was deducted, mission paid and taxes related to the acquisition, except for VAT. the corresponding acquisition of such property shall be subject to Still, in an exchange of business assets for other assets the acquisition VAT in Lithuania. price of the newly acquired assets is the acquisition price of the assets If only a
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