033 Revision of Exemption Criteria of Controlled Foreign Companies Law
We wrote about the revision of trigger tax rate and share rate on 3rd August 2010. Today we talk about provisions of exclusion from the application when a company is a special foreign subsidiary.
There are several criteria for a company to be exempt from Controlled Foreign Companies Law, and they have changed the business criteria and irrelevant criteria. The business criteria did not include possession of shares, but now it does include if the share is the one of controlled companies possessed by a controlling company.
In addition, transactions between a controlling company (a parent company) and controlled companies are not considered as transactions between associated companies if they are wholesalers. Therefore, business holding companies and parent distributor are not subject to Controlled Foreign Companies Law any more, and more and more companies go abroad to run their business worldwide. This revision is going to be effective from the year beginning after 1st April 2010.
