Volume 44 (2016) / Issue 2

Christian Kahlenberg, 'Hybrid Entities: Problems Arising from the Attribution of Income Through Withholding Tax Relief – Can Specific Domestic Provisions be a Suitable Solution Concept?' (2016) 44 Intertax, Issue 2, pp. 146–162


The steadily increasing globalization of markets creates an immediate need to make adjustments to international tax law. At the same time, the lack of harmonization among national regulations fosters aspirations to achieve international tax arbitrage. In recent years, hybrid entity structures have been mentioned as effective means of tax avoidance or tax evasion. To respond to this development in a coordinated way, the BEPS project was initiated, and the OECD was put in charge to design viable solutions for a total of fifteen trouble spots that had been identified. The goal was to make sure that all states would act in sync. Recently – on October 5th – the final reports were published. Within the scope of Action 2, the particular focus is on hybrid entity structures. The present article uses the current developments at OECD level as an opportunity to scrutinize the addressed regulation for hybrid structures and to point out remaining loopholes. Subsequently, potential solutions are presented which also anticipate the risk of the treaty shopping.

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ISSN: 0165-2826
ID: TAXI2016010