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International Controlled Foreign Corporation (CFC) Legislation

by country

USA

 

 

Russia

 

 

United Kindom

 

 

 

European Community

Germany

The CFC provisions in Germany (§§ 7-14 AStG, Foreign Tax Act) apply to both individual and corporate shareholders of a controlled foreign company.[20] Such shareholders must include in their currently taxable income as a deemed dividend their share of passive income if two tests are met:

 

German residents control the non-German corporation and

That corporation is taxed at a rate of less than 25% on the passive income.

Control in this case is ownership by all German residents of more than 50% of the vote or capital of the foreign corporation. Such ownership includes both direct ownership and ownership through related persons. In determining the 50% threshold, all German residents are considered, even those owning very minor amounts.

 

Passive income is all income which is not active income, as extensively defined. Active income, however, excludes income where there has been substantial assistance by a German related party in earning the income. Active income also excludes all income of a foreign corporation lacking sufficient substance. Generally, passive income resembles U.S. foreign personal holding company income (discussed above). However, deemed dividends may be exempted under some treaties.

 

© Wikipedia

 

Other countries