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11.2. Tax Consequence of Business Emigration, Corporate Inversions and the Cessation of Business

Domestic law does not include exit taxes as such.

The winding up of a company or branch, upon which the reimbursement of capital and the distribution of remaining assets is performed, will trigger the following consequences:

  • The repayment of the capital invested does not constitute taxable income.
  • Any distribution of remaining assets in excess of the capital invested qualifies as dividend and therefore is taxed under the special rules applicable to such type of income.

[NOTE: business restructuring in the sense of re-arranging the supply chain and the associated functions and risks is addressed under Transfer pricing below]