transaction structure & jurisdictions john fulton, head of tax

Transaction structure & jurisdictionsJohn Fulton, Head of Tax

© HKAC | Hong Kong | 3 Nov 15 | 2

© HKAC | Hong Kong | 3 Nov 15 | 3

Transaction structure & jurisdictions

1 Developing a deal structure with SPC

© HKAC | Hong Kong | 3 Nov 15 | 4

Transaction structure & jurisdictions

2 Tradability of assets

© HKAC | Hong Kong | 3 Nov 15 | 5

Transaction structure & jurisdictions

3 Suitable jurisdictions for operating leasing

© HKAC | Hong Kong | 3 Nov 15 | 6

Transaction structure & jurisdictions

1 Developing a deal structure with SPC

2 Tradability of assets

3 Suitable jurisdictions for operating leasing

© HKAC | Hong Kong | 3 Nov 15 | 7

© HKAC | Hong Kong | 3 Nov 15 | 8

Transaction structure & jurisdictions

1 Developing a deal structure with SPC

© HKAC | Hong Kong | 3 Nov 15 | 9

Developing a deal structure with SPC

Lessee[ ]

© HKAC | Hong Kong | 3 Nov 15 | 10

Developing a deal structure with SPC

Lessee[ ]

Operating lease

© HKAC | Hong Kong | 3 Nov 15 | 11

Developing a deal structure with SPC

Lessee[ ]

Lessor

Operating lease

© HKAC | Hong Kong | 3 Nov 15 | 12

Developing a deal structure with SPC

Lessee[ ]

Lessor[Ireland]

Operating lease

© HKAC | Hong Kong | 3 Nov 15 | 13

Developing a deal structure with SPC

Lessee[ ]

Lessor[Ireland]

Operating lease

Loans, shares, other interests

Investors[ ]

© HKAC | Hong Kong | 3 Nov 15 | 14

Developing a deal structure with SPC

Lessee[ ]

Lessor[Ireland]

Operating lease

Loans, shares, other interests

Investors[ ]

No WHT

Efficient tax

No WHT

© HKAC | Hong Kong | 3 Nov 15 | 15

Developing a deal structure with SPC

Lessee[ ]

Lessor[Ireland]

Head lease

Loans, shares, other interests

Investors[ ]

No WHT

Efficient tax

No WHT

[ ]Operating lease

© HKAC | Hong Kong | 3 Nov 15 | 16

© HKAC | Hong Kong | 3 Nov 15 | 17

Transaction structure & jurisdictions

1 Developing a deal structure with SPC

© HKAC | Hong Kong | 3 Nov 15 | 18

Developing a deal structure with SPC

Ultimate investor pays tax (if any) only at home

and

minimal tax impediments on the way through

© HKAC | Hong Kong | 3 Nov 15 | 19

Developing a deal structure with SPC

• Entry (eg. aircraft purchase, delivery, import, financing, security)

• Term(eg. aircraft rentals, interest, expenses)

• Exit (eg. aircraft redelivery, export, sale)

© HKAC | Hong Kong | 3 Nov 15 | 20

Developing a deal structure with SPC

1 (Entry) Purchase VAT, import VAT, customs duty, stamp duty, registration fees

2 (Term) WHT (rent and interest), VAT, Corporate tax (rate, deductions, grouping)

3 (Exit) Corporate tax (rate, deductions, recapture, grouping), transfer taxes

© HKAC | Hong Kong | 3 Nov 15 | 21

© HKAC | Hong Kong | 3 Nov 15 | 22

Transaction structure & jurisdictions

2 Tradability of assets

© HKAC | Hong Kong | 3 Nov 15 | 23

Tradability of assets

1 (Entry) Purchase VAT, import VAT, customs duty, stamp duty, registration fees

2 (Term) WHT (rent and interest), VAT, Corporate tax (rate, deductions, grouping)

3 (Exit) Corporate tax (rate, deductions, recapture, grouping), transfer taxes

© HKAC | Hong Kong | 3 Nov 15 | 24

© HKAC | Hong Kong | 3 Nov 15 | 25

Transaction structure & jurisdictions

3 Suitable jurisdictions for operating leasing

© HKAC | Hong Kong | 3 Nov 15 | 26

Suitable jurisdictions for operating leasing

1 (Entry) Purchase VAT, import VAT, customs duty, stamp duty, registration fees

2 (Term) WHT (rent and interest), VAT, Corporate tax (rate, deductions, grouping)

3 (Exit) Corporate tax (rate, deductions, recapture, grouping), transfer taxes

© HKAC | Hong Kong | 3 Nov 15 | 27

Lessee[ ]

Lessor[Ireland]

Head lease

Loans, shares, other interests

Investors[ ]

No WHT

Efficient tax

No WHT

[ ]Sub lease

Suitable jurisdictions for operating leasing

© HKAC | Hong Kong | 3 Nov 15 | 28

© HKAC | Hong Kong | 3 Nov 15 | 29

Thank you

John FultonHead of Tax

john.fulton@hkac.com