Axel Hilling
Docent
Income Taxation of Derivatives and other Financial Instruments – Economic Substance versus Legal Form, A study focusing on Swedish non-financial companies
Författare
Summary, in Swedish
Popular Abstract in Swedish
From an economic viewpoint, derivatives and credit-extension instruments are the basic building blocks of all financial instruments. By structuring these building blocks in various combinations, it is possible to attain the economic substance of any conventional financial instrument – regular shares or bonds, as well as more complex financial instruments such as contingent debt instruments.
The legal form of financial instrument in the Swedish income tax legislation
is not systematically based on the instrument’s economic substance. This creates situations in which the payoff from a certain economic substance is taxed arbitrarily. The payoff from a financial instrument is not always taxed similar to the net payoff from its building blocks, a situation that provides tax arbitrage opportunities within the Swedish income tax system.
The study presented in this book addresses the Swedish income tax treatment
of derivatives and other financial instruments held by non-financial companies.
Special emphasis is given to the income tax treatment of and tax arbitrage
opportunities related to hybrid financial instruments and synthetic instruments. Possible ways of dealing with financial instruments used for hedging the business risks of non-financial companies are also discussed. In addition, the book presents methods for improving the tax treatment of financial instruments and preventing existing tax arbitrage opportunities related to them.
From an economic viewpoint, derivatives and credit-extension instruments are the basic building blocks of all financial instruments. By structuring these building blocks in various combinations, it is possible to attain the economic substance of any conventional financial instrument – regular shares or bonds, as well as more complex financial instruments such as contingent debt instruments.
The legal form of financial instrument in the Swedish income tax legislation
is not systematically based on the instrument’s economic substance. This creates situations in which the payoff from a certain economic substance is taxed arbitrarily. The payoff from a financial instrument is not always taxed similar to the net payoff from its building blocks, a situation that provides tax arbitrage opportunities within the Swedish income tax system.
The study presented in this book addresses the Swedish income tax treatment
of derivatives and other financial instruments held by non-financial companies.
Special emphasis is given to the income tax treatment of and tax arbitrage
opportunities related to hybrid financial instruments and synthetic instruments. Possible ways of dealing with financial instruments used for hedging the business risks of non-financial companies are also discussed. In addition, the book presents methods for improving the tax treatment of financial instruments and preventing existing tax arbitrage opportunities related to them.
Publiceringsår
2007
Språk
Engelska
Dokumenttyp
Doktorsavhandling
Förlag
Jönköping International Business School
Ämne
- Law
Nyckelord
- Taxation
- Financial instruments
- Financial accounting
- Derivatives
Aktiv
Published
Handledare
- Björn Westberg
- Kristina Artsberg
Försvarsdatum
21 september 2007
Försvarstid
13:00
Försvarsplats
Jönköping International Business School
Opponent
- Peter Melz (Professor, Doctor of Laws)