Europa Tax provisions – Harmonization of laws – Indirect taxes on the raising of capital – Waiver by a parent company of a claim against its subsidiary – Subjection to capital duty – Permissible (Council Directive 69/335, Art. 4(2)(b))
Where a parent company clears off a liability of a subsidiary by waiving all or part of a claim against the subsidiary, capital duty may be levied under Article 4(2)(b) of Directive 69/335 concerning indirect taxes on the raising of capital.
Owing to the taking over of all or part of the subsidiary’ s losses, such a waiver represents the provision of a service which increases the assets of that company and may increase the value of its shares by helping to strengthen its economic potential.
Citations:
C-15/89, [1991] EUECJ C-15/89
Links:
European
Updated: 01 June 2022; Ref: scu.160194