Conversion of preference shares into ordinary shares through mandatory conversion pursuant to the terms of the articles of association is not regarded as a taxable sale according to an
advance tax ruling decided by the Swedish Council for
Advance Tax Rulings on November 7, 2008, which was upheld by the Swedish Supreme Administrative Court in a judgment on May 14, 2009.
Starting with 1991 this board has been transformed into a semi-judiciary independent body named the Council of
Advance Tax Ruling. To the Swedish AIFS procedure both the tax payers and the National Fiscal Committee may apply.
The changes include the introduction of a formal
advance tax ruling procedure and a step up opportunity on certain conversions of a corporation into a partnership but eliminating at the same time a loophole in the international participation exemption.
Advance tax ruling is a procedure that allows taxpayers to achieve certainty concerning the tax consequences of a contemplated transaction.
The designation is obtained by requesting an
advance tax ruling. The difficulty in making the request or obtaining the ruling is that the term "project" is not defined in the Act and there is no guidance available in opinions, public rulings, published guidelines, and, arguably, the jurisprudence to aid taxpayers and CRA in making the determination.
Finnish-Swedish IT company TietoEnator Corporation said on Tuesday (6 July) that it had received an
advance tax ruling regarding the parent company asset write-downs booked and announced on 21 April 2004.
The request was for an
advance tax ruling on their plans to move over $2 billion of assets to the US.
On March 8, 1991, a law firm acting for a family trust asked Revenue Canada for an
advance tax ruling to verify that public company shares held within the trust could leave Canada on a tax-free basis.
It said common features of deals arranged by PwC that it investigated saw the companies all set up subsidiaries in Luxembourg where they were protected by
advance tax rulings from the authorities.
The decision came after the Canadian government stopped providing
advance tax rulings on income trust offerings pending a tax review.
A study conducted by the EU's accountancy lobby group, the Federation des Experts Comptables (FEE), has concluded that
advance tax rulings in the EU often involve different treatment in the various different countries surveyed.