7 Case study 2BankCo, a subsidiary from HoldCo (tax resident in EU Member State A) is tax resident in EUMember State B where the corporate income tax rate amounts to 15%. In 2020 BankCO grantsHolaco a loan for the amount of EUR 200.000 (interest rate 2%). According to State's Bdomestic tax legislation interests paid to a non-resident taxpayer are subject to a 5%withholding tax. Member State A and Member State B have concluded a double tax treatyTollowing the OECD Model Tax Convention, In this treaty Member State B has committed torelieve any outstanding double taxation by using the credit method.Please calculate the tax due in EU Member State A and EU Member State B and explain yourconclusion.

Case study 2 BankCo, a subsidiary from HoldCo (tax resident in EU Member State A) Is Member State B where the corporate income tax rate amounts to 15%. In 2020 BankCO grants Holaco a loan for the amount of EUR 200,000 (interest rate 2%). According to State's B domestic tax legislation interests paid to a non-resident taxpayer are subject to a S% withholding tax. Member State A and Member State B have concluded a double tax treaty following the OECD Model Tax Convention, In this treaty Member State B has committed to relieve any outstanding double taxation by using the credit method.

Case study 2 BankCo, a subsidiary from HoldCo (tax resident in EU Member State A) Is Member State B where the corporate income tax rate amounts to 15%. In 2020 BankCO grants Holaco a loan for the amount of EUR 200,000 (interest rate 2%). According to State's B domestic tax legislation interests paid to a non-resident taxpayer are subject to a S% withholding tax. Member State A and Member State B have concluded a double tax treaty following the OECD Model Tax Convention, In this treaty Member State B has committed to relieve any outstanding double taxation by using the credit method.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter25: Taxation Of International Transact Ions

Section: Chapter Questions

Problem 29P

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