Debt-flavoured Equity Instruments in International Tax Law - Intertax View Debt-flavoured Equity Instruments in International Tax Law by - Intertax Debt-flavoured Equity Instruments in International Tax Law 42 6/7

Debt and equity can be structured to resemble one another through hybrid financial instruments. In this contribution the emphasis is on the tax issues related to debt-flavoured equity instruments in international tax law. This most important example of such instruments is preference shares. The article introduces the financial construction of preference shares and presents the rationale behind the existence hereof. As the main contribution the article presents an analysis of the international tax law aspects of preference shares, which includes a comparative overview, emphasizing the domestic tax classification and treatment in the United States, Germany, and Denmark. Moreover, the classification and treatment according to EU tax directives and double tax treaties is presented.

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