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verdeckte Einlage

English translation: constructive (equity) contribution

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GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
German term or phrase:verdeckte Einlage
English translation:constructive (equity) contribution
Entered by: Emma Gledhill
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21:07 Feb 5, 2009
German to English translations [PRO]
Bus/Financial - Law: Taxation & Customs
German term or phrase: verdeckte Einlage
Wikipedia gives a nice, comprehensive article about this:

http://de.wikipedia.org/wiki/Verdeckte_Einlage

but I'm urgently looking for an English translation (official or otherwise) for the term, usual searches proving fruitless. Any help gratefully received! TIA
Emma Gledhill
Local time: 18:19
constructive (equity) contribution
Explanation:
Kim's source may be an EU document, but somehow it looks like a rather simplistic translation to me.

The "verdeckte Einlage" is the counterpart to the "verdeckte (Gewinn-)Ausschüttung", or "constructive dividend".

Most sources give "constructive contribution" for this, including:

http://www.ey.com/Global/Assets.nsf/Luxembourg_E/EU_Tax_News...$file/EU%20TaxNews%20Jan-Feb%202007.pdf

http://www.internationaltaxreview.com/Default.asp?Page=10&PU...

http://books.google.de/books?id=uRk9ECvOZvYC&pg=PA348&lpg=PA...

http://books.google.de/books?id=j8nftGSrKcEC&pg=RA1-PA358&lp...

A few give "constructive equity contribution", e.g.

http://www.hmrc.gov.uk/bulletins/tb25.htm

but we've always used simply "constructive contribution" in all our tax-related work.
Selected response from:

RobinB
Germany
Local time: 18:19
Grading comment
Thanks, I went for Robin's answer in the end, partly down to his comprehensive corroboration and partly because I wanted to avoid even the slightest hint of concealment/underhandedness for a transaction that was clearly within the law. The context also suggested a nuance of "de facto" rather than hidden imv. Client also happy, which is always a bonus :-)
4 KudoZ points were awarded for this answer

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Summary of answers provided
4 +2constructive (equity) contributionRobinB
3 +1hidden capital contribution
Kim Metzger


  

Answers


4 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5 peer agreement (net): +1
hidden capital contribution


Explanation:
PDF] GERMANYFile Format: PDF/Adobe Acrobat - View as HTML
Hidden capital contributions. The rules governing hidden capital contributions (verdeckte Einlage) are found in Sec. 4(1) of ...

ec.europa.eu/taxation_customs/resources/documents/common/publications/studies/IR_dir_de.pdf

--------------------------------------------------
Note added at 11 mins (2009-02-05 21:18:57 GMT)
--------------------------------------------------

Hidden capital contributions
The rules governing hidden capital contributions (verdeckte Einlage) are found in Sec. 4(1) of
the ITL in conjunction with Sec. 8(1) of the CITL. A hidden capital contribution can be
assumed if a shareholder or a related party of the shareholder makes a contribution to the
corporation without proper consideration and the reason for this contribution can only be
found in the shareholder relationship. This is the case if a third party (a non-shareholder) - by
applying sound business principles - would not have agreed to the conditions of the
transaction if he had dealt with the company.
http://ec.europa.eu/taxation_customs/resources/documents/com...


Kim Metzger
Mexico
Local time: 11:19
Native speaker of: Native in EnglishEnglish
PRO pts in category: 149

Peer comments on this answer (and responses from the answerer)
agree  xxxwfarkas: Bravo ! Hot topic in the context of transfer pricing/thin capitalization.
1 hr
Login to enter a peer comment (or grade)

43 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +2
constructive (equity) contribution


Explanation:
Kim's source may be an EU document, but somehow it looks like a rather simplistic translation to me.

The "verdeckte Einlage" is the counterpart to the "verdeckte (Gewinn-)Ausschüttung", or "constructive dividend".

Most sources give "constructive contribution" for this, including:

http://www.ey.com/Global/Assets.nsf/Luxembourg_E/EU_Tax_News...$file/EU%20TaxNews%20Jan-Feb%202007.pdf

http://www.internationaltaxreview.com/Default.asp?Page=10&PU...

http://books.google.de/books?id=uRk9ECvOZvYC&pg=PA348&lpg=PA...

http://books.google.de/books?id=j8nftGSrKcEC&pg=RA1-PA358&lp...

A few give "constructive equity contribution", e.g.

http://www.hmrc.gov.uk/bulletins/tb25.htm

but we've always used simply "constructive contribution" in all our tax-related work.

RobinB
Germany
Local time: 18:19
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 151
Grading comment
Thanks, I went for Robin's answer in the end, partly down to his comprehensive corroboration and partly because I wanted to avoid even the slightest hint of concealment/underhandedness for a transaction that was clearly within the law. The context also suggested a nuance of "de facto" rather than hidden imv. Client also happy, which is always a bonus :-)

Peer comments on this answer (and responses from the answerer)
agree  Ted Wozniak: I have to agree with Robin here.
18 hrs

agree  Harald Moelzer (medical-translator)
3 days17 hrs
Login to enter a peer comment (or grade)




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