Sun, Mar. 08, 2009

Taxes Complicate Bailouts

CK - Washington.   German enthusiasm for a statutory rescue package for the GM subsidiary, Opel, suffers. Reportedly, questionable profit transfers from Opel to GM resulted in the complete avoidance of profit taxation in Germany. At issue is a €655 million income shift, in the form of patent royalties, that nixed German tax claims.

A similar complication arises in the joint U.S.-Switzerland rescue of UBS bank. As the Washington Post notes, one division of the Treasury department helps finance the rescue, while the tax division manages to infuriate the Swiss with exchange of information demands on American tax cheats. The requests push the Swiss to violate their laws.


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