Exit taxation
From Wikipedia the free encyclopedia
Exit taxation (also known as an exit fee, exit payment, compensation payment or exit charge) is a payment made for discontinuation of certain economic activities within corporate groups, required in many tax jurisdictions by transfer pricing regulations. Within the European Union, exit taxation is provided for in Article 5 of Directive 2016/1164 of 12 July 2016 "laying down rules against tax avoidance practices that directly affect the functioning of the internal market".[1]
Exit taxation is also referred to as compensation for the "transfer of the place of business", remuneration for taking over functions, assets, risks and contracts with customers, payment for the take-over of part of the business, remuneration for the transfer of production and sales capabilities or transfer of profit potential.[2][3]
The obligation to pay the exit fee corresponds to the responsibility of the other party to cease a certain type of economic activity and it is often linked to other types of benefits, such as the transfer of ownership of production machines or the transfer of industrial property rights or know-how. However, the fee for these assets is usually calculated separately, so in reality it is a remuneration for the transfer of functions or risks excluding assets.[3][2]
References[edit]
- ^ EUR-Lex, Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market, accessed 16 April 2021
- ^ a b Czerwiński, Marcin; Wieśniak-Wiśniewska, Anna (2016). "Glosa do wyroku NSA z dnia 5 kwietnia 2016 r., II FSK 308/14". LEX/El. – via Wolters Kluwer.
- ^ a b "Business restructuring: Exit charges for restructurings in Europe | International Tax Review". www.internationaltaxreview.com. 17 December 2012. Retrieved 2017-12-23.