Holding company matrices

Multinational companies may decide to establish a holding company for a range of reasons. For example, a holding company may be an efficient way to manage a group of subsidiaries in a particular region by centralizing financing, licensing and management activities. A holding company also may provide tax efficiencies in relation to withholding taxes on dividends and taxes on capital gains.

Choosing the appropriate location for a holding company is a complex procedure—involving consideration of business, economic, logistical and operational requirements. The tax attributes of the location are also a relevant factor. How will income and gains of the holding company be taxed and what is the effective tax rate? Are there any substance requirements? Will payments by the holding company be subject to withholding tax? Does the location have an extensive tax treaty network?

These questions are addressed in the holding company matrices, which summarize in an annotated table key attributes of the regimes in Asia Pacific, Europe and Latin America.

The holding company information also can be found in a matrix format in the Deloitte International Tax Source (DITS), which allows users to review the features in a table format and to compare the key tax attributes of potential holding company locations across Asia Pacific, Europe and Latin America.