Page 27 - Strategic Tax Planning for Global Commerce & Investment
P. 27
Strategic Tax Planning for Global Commerce and Investment
parent is located in a jurisdiction that taxes on a worldwide
basis and does not have an exemption system.
INTEGRATED GLOBAL STRUCTURE
Tax Planning for Financing Activities
Most countries’ tax systems make a distinction between the tax
treatments of debt versus equity. Debt is generally treated as a
resource that does not belong to the company therefore,
interest paid is tax-deductible expense. On the other hand, a
distribution that the company pays to shareholders on its own
capital is not a tax-deductible expense. This principle is not
followed in all jurisdictions. For example, Brazil allows tax
relief for dividends up to the amount equivalent to a notional
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