团队合作欧亮内容.pdfVIP

1. What is Th apitalization Rules A IS SAID TO BE THINLY CAPITALIZED WHEN THE LEVEL OF ITS DEBT IS MUCH GREATER THAN ITS EQUITY CAPITAL, I.E. ITS GEARING, OR LEVERAGE, IS VERY HIGH. AN ENTITYS DEBT-TO-EQUITY FUNDING IS SOMETIME PRESSED AS A RATIO. FOR EXAMPLE, A GEARING RATIO OF 1.5:1 MEANS THAT FOR EVERY $2 OF EQUITY THE ENTITY HAS $3 OF DEBT. A HIGH GEARING RATIO CAN CREATE PROBLEMS FOR CREDITORS, WHICH BEAR THE SOLVENCY RISK OF THE , AND REVENUE , WHICH ARE CONCERNED ABOUT EXCESSIVE INTEREST CLAIMS. Construction of IT 1. Nonresident lenders. The th apitalization rules generally apply only to nonresident lenders who own a significant percentage of the shares of the resident corporation.The level of share ownership varies from 15 percent of the shares to control of the resident corporation 2. Domestic entities. The thin capitalization rules of most countries apply only to resident corporations.The strip of profits through the payment of excessive interest to related s may also arise,however,with respect to resident partnerships and trusts and branches of nonresident corporations. 3. Determinant of excessive interest. GeneralIy the th apitalization rules apply only to certain excessive”interest paid to nonresident shareholders resident corporation.Excessive interest is ordinarily determined by reference to the debt:equity ratio of the domestic corporation.In other words,it is only interest on debt that is artificially large in relation to equity in effect, debt that is disguised equity-that is not deductible. 3. Th apitalization Rules anada THIN CA