Dear Colleague,

This week:

• Tax-news Headlines
• Aruba
• Germany
• Updated - Offshore Service Provider's Directory
• 25% Discount: LowtaxLibrary

I hope you find this update useful. Please remember that you can customise your mailing preferences by visiting your own profile page to choose from 29 offshore tax and law subjects in order to receive just the information you want. You can also unsubscribe completely by following the instructions at the bottom of this page.

Kind regards,

Kate James

Onshore

Germany

Germany has high corporate income tax rates and has never been considered a tax-efficient financial center. Nonetheless it offers significant fiscal concessions to corporates through co-ordination centres, holding companies and a number of special corporate income tax regimes.

In November 2006, Germany's coalition government arrived at an agreement over key company tax reforms which will reduce the overall corporate tax burden, currently one of the highest in the world.

Finance Minister Peer Steinbrueck told reporters after a working group meeting that the reforms will cut the overall corporate tax burden to a little under 30% from the current level of almost 40%.

This will be brought about largely by a cut in the 25% headline corporate tax rate, paid by large companies, to 15% in 2008. Companies will continue to pay corporate tax at the local level at an average of about 13%.

The reforms are expected to cost EUR5 billion (US$6.4 billion) in the first year and EUR30 billion overall, but EUR25 billion of this will be clawed back through efforts to widen the tax base.

One offsetting measure is the controversial decision to restrict the amount of interest that German companies can deduct from loans received from overseas units. Many business leaders worry that this measure will restrict companies' ability to invest.

Learn more in our full Germany Knowledgebase.

Directory

For Visitors

Our aim is to offer you the ability to locate a service provider specialising in the field of your choice, in the jurisdiction of your choice, with just a few clicks. We only list confirmed entries to reduce the number of dead-ends and strictly enforce categorisation criteria to ensure that you find exactly the service you are after. As of September 2007 we have begun to implement a new, expanded format to make the directory even more user friendly and comprehensive.

Click here for the new directory home page.

For Service Providers

The Lowtax Offshore Service Provider's Directory offers firms the ability to highlight their services to one of the web's largest specialised tax, legal and offshore audiences. Our visitors include large numbers of corporates and HNWIs. Standard entry in the directory is free as long as your details are kept up to date. Premium entry options are available. Please contact diectory@lowtax.net for further details.

Click here for the new directory home page.

Offshore

Aruba

Aruba Given Investment Grade By S&P, by Amanda Banks, Tax-News.com, London 05/06/2008

2007 Saw Record Investment In Latin America And Caribbean, by Mike Godfrey, Tax-News.com, Washington 23/05/2008

Aruba, Bonaire, Curacao To Get New WiMax Service, by Amanda Banks, Tax-News.com, London 20/05/2008

Aruba is a small (75 sq m) island off Venezuela with a population of 87,000. It separated from the Netherlands Antilles in 1987; they both still form part of the Kingdom of the Netherlands. The legal, political and administrative systems are largely modelled on Dutch originals, but there has been some common law influence on the offshore regime. Government, Judiciary and Central Bank are established in Oranjestad, the capital. Dutch is the official language, but English is often spoken; the local language is Papamiento, a Creole dialect. The local currency is the florin, fixed at 1$US = 1.79 Af. There is a well-connected airport near Oranjestad.

Aruba is an associated territory of the EU. The Aruban economy is very open and is highly dependent on tourism and offshore financial services. Most goods are imported since there are few natural resources. An important refinery was shut for a while but is now open again, mostly for trans-shipment. GDP per head was US$21,800 at PPP by 2004, making it one of the highest levels in the region; economic fundamentals are good and unemployment is low enough to create labour shortages.

Local taxes are quite high for residents, but there is a well-developed offshore sector which originated in World War Two as a haven for Dutch companies fleeing the German occupation of the Netherlands. Many financial links are to the Netherlands in one direction and to South America in the other. The financial and professional infrastructure is well-developed, with a Dutch (civil law) cast. Banking, licensing, insurance and holding companies are the main offshore sectors. The tax burden on most offshore activities is light but not minimal. There is a Free Zone which has successfully attracted manufacturing companies with markets in the EU and the Americas.

Aruba has a tax treaty only the Netherlands, which gives access to the many Dutch tax treaties and good withholding tax regime. There is no banking secrecy legislation as such, but beneficial ownership of offshore companies does not have to be disclosed. The jurisdiction normally responds to requests for help on tax matters, although local professionals do what they can to maintain confidentiality.

A New Fiscal Framework introduced alongside a new Dutch Tax Treaty (BRK) in response to international pressure as from 1st July 2003 abolished the distinction between offshore and onshore companies, but installed a generous participation exemption scheme which in effect maintains previous tax privileges for non-Aruban business activities.

Learn more in our full Aruba Knowledgebase.