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German to English translations [PRO] Law/Patents - Law: Taxation & Customs
German term or phrase:Kapitaleinziehung
Die Aufnahme eines Kredits durch den Käufer bei einer der Gesellschaften gegen Verpfändung von Anteilen von Dr. AE kann als gleichbedeutend mit einer Kapitaleinziehung ausgelegt werden mit allen Folgen, die daraus aus dem Außensteuergesetz entstehen.
Leaning toward "capital moving into the country" because of the refernce to the Foreign Tax Act. But forfeiture of capital is an alternative translation.
Sorry, but I'm confused again. If the seller is Swiss, and the corporation is Lux, where's the connection with Germany (AStG)? I would have gone for "capital repayment", but I'm not so sure any more. I'm pretty sure it's not "retirement" (cancellation).
OK, I think we're getting there, slowly. Tax is *always* complicated. One final question: do you know where the seller (AE) is resident? Germany or CH. If CH, can you tell from the text if he's German, and when he moved to CH?
Mr. AE is selling his shares in a Swiss company as part of a deal involving the formation of two separate trusts in Bermuda, one for each of his heirs. The source text is a memo by a Swiss attorney (my apologies for leaving that out) recording a meeting in which attorneys for all the shareholders discussed how best to structure the share sale with regard to taxes and other considerations. The paragraph I posted with the question is from a section in which they go through the alternatives to selling the shares through a normal sale. They seem to be rejecting the idea described in that paragraph because of the Aussensteuer consequences:
Als weitere Möglichkeiten wurden in Betracht gezogen:
- Verpfändung der Beteiligungserträge ggfls. in der Höhe der Annuität an Dr. AE
- unwiderrufliche Anweisung des Käufers an die Gesellschaften, die Annuität direkt an Dr. AE auszuzahlen (soweit ausreichende Dividenden beschlossen wurden.)
Is this option perhaps what he’s referring to when he says “Aufnahme eines Kredits durch den Käufer bei einer der Gesellschaften”?
Especially the reference to the Außensteuergesetz would suggest a link to the German CFC rules (Hinzurechnungsbesteuerung) governing thin cap, but again it's impossible to say without knowing more about who's investing in whom. Please give us more info!
"Kapitaleinziehung" is not a standard German tax term of art. This has clearly got to do with thin cap rules, probably either recourse loans or back-to-back financing, but it's difficult to say exactly without more context.
Automatic update in 00:
16 mins confidence: peer agreement (net): +1
retirement of stock
Explanation: according to Eichborn and Friedrich K. Feldbausch Finance Dictionary
-------------------------------------------------- Note added at 6 hrs (2007-04-05 08:34:59 GMT) --------------------------------------------------
To start with, if a company wants to raise capital (money), one of its options is to issue stock. A company has other methods, such as issuing bonds and getting a loan from the bank. But stock raises capital without creating debt; i.e., without creating a legal obligation to repay borrowed funds.
Raghunathan Local time: 20:34 Native speaker of: Tamil PRO pts in category: 16