A Description of operations - DocumentCloud
For the attention of Mr Marius Kohl Administration des Contributions Directes Bureau d'imposition Societes VI 18, Rue du Fort Wedell L-2982 Luxembourg
PricewalerhouseCoopcrs Socictc a rcsponsabilitc limitcc Rcviscur d'cntrcpriscs 400, roulc d'Esch B.P. 1443 L-1014 Luxembourg
Telephone +352 494848-1 Facsimile+352 494848-2900 www.pwc.com/lu [email protected]
11 February 2009 References: ILPI/TSDK/Q0608021M-AAMI
BCG Luxembourg Holding S.a r.l. - 2003 2412 999 The Boston Consulting Group Luxembourg S.a r.l. -Tax number not yet available
Dear Mr Kohl, We refer to our meeting of December 3, 2008 and to our letters dated 3 July 2003 (RBS/SBT/AAMI/Q0603004M-KNCN), 30 July 2003 (RBS/SBT/AAMI/Q0603008MKNCN) and 14 February 2005 (RBS/AAMl/HEBN/Q0605003M-CNHT) regarding the Luxembourg companies of the Boston Consulting Group.
A
Description of operations
A.1 Background 1
Boston Consulting Group (hereafter "BCG") is among the largest international business-consulting groups in the world, with 66 offices in 38 countries.
2
The group is already present in Luxembourg through BCG Holdings SCS, BCG Luxembourg Holding S.a r.l. and BCG Holding S.a r.l ..
3
Further to previous restructuring (please refer to our letters dated 3 July 2003, reference RBS/SBT/AAMI/Q0603004M-KNCN, 30 July 2003, reference RBS/SBT/AAMI/Q0603008M-KNCN, and 14 February 2005, reference RBS/AAMI/HEBN/Q0605003M-CNHT), BCG Luxembourg Holding S.a r.I. (hereafter "Big Luxco") entered into a Credit Facility Agreement (hereafter "the CFA") with BCG Holdings SCS for a amount of approximately EUR 770 Mio.
R.C.S. Luxemtx>urg B 65 477 ·TVA LUl756444713
f'R/cEWAIERHousE(roPERS I 4
The participations in BCG Holding GmbH (hereafter "BCG Germany"), BCG SAS and BCG Ireland as well as notes receivables due by BCG Germany ("German Note") and BCG SAS ("French Note") have been sold by BCG Holding Group SCS to Big Luxco against the CFA, Big Luxco being in a back to back position for its financial assets.
5
For your convenience, please find below the current simplified organization chart of the BCG Group: BCG Holding Corp US
The German Note BCG Holding GmbH BCG France
BCG Holding Sari
A.2
Facts
6
Big Luxco intends to transfer the French note and the participation in BCG SAS to a new Luxembourg subsidiary ("New Luxco") through the following steps: Step 1: Big Luxco fonns New Luxco. Step 2: Big Luxco transfers BCG SAS to New Luxco in exchange for shares and the French Note against preferred equity certificates (hereafter "the PEC'').
7
Therefore, the PEC will finance the acquisition of the French Note at the level of New Luxco and the latter will be in a back to back position.
(2)
8
Big Luxco will enter into a tax unity with New Luxco as from FY 2009.
9
For your convenience, please find attached a simplified organization chart of the BCG group after the contemplated restructuring (please see Appendix 1).
B
Applicable tax regime
B.1 L uxembourg tax residency 10
New Luxco will have its statutory seat in Luxembourg. Moreover, New Luxco will have its place of central administration in Luxembourg since its shareholders' meetings and its board meetings will be held in Luxembourg, that the main management decisions will be effectively taken in Luxembourg and that its accounting will be done in Luxembourg.
11
Consequently, New Luxco will be considered to be Luxembourg tax resident w ithin the meaning of article 159 of the Luxembourg income tax law ("LITL") and within the meaning of the double tax treaties concluded by Luxembourg. Luxembourg tax residency certificates will therefore be delivered by the Luxembourg tax authorities upon request.
B.2
Preferred Equity Certificate (PEC)
8.2.1 Characterization of the PEC 12
The PEC will be regarded as debt for both corporate income tax purposes and net wealth tax purposes and the interest accrued on it will be fully deductible.
13
As a high level summary of the PEC's terms and conditions please see Appendix 2.
14
Given the aforementioned characteristics of the PEC, the yield will be falling out of the scope of article 146 (1) 1, 2 and 3 LITL.
15
Furthermore, since there is no intention for the parties to create a silent partnership and no intention to establish a company in the sense of article 1832 of the civil code, the yield on the PEC will be falling out article 146 (2). With regard to article 146 (3), the PEC does not entitle the holder to the distributable profit of the issuer, hence article 146 (3) docs not apply in the case at hand.
16
As a consequence, any interest New Luxco shall pay under the PEC will not be subject to Luxembourg withholding tax and it will be fully deductible for corporate income tax and municipal business tax.
(3)
17
Moreover, the interest paid by New Luxco on the PEC will not be reclassified as dividend payments for corporate income tax and municipal business tax pursuant to either articles 164 (2) or 164 (3) LITL and it will not be subject to wit.W"'>1.W1l)4l11> ~~~ with regard to article 146 (l) LITL. ,;.~
;e~
~
0
B.3 18
19
Share for share exchange (article 22bis)
~~
PricewalerhouseCoopcrs Socictc a rcsponsabilitc limitcc Rcviscur d'cntrcpriscs 400, roulc d'Esch B.P. 1443 L-1014 Luxembourg
Telephone +352 494848-1 Facsimile+352 494848-2900 www.pwc.com/lu [email protected]
11 February 2009 References: ILPI/TSDK/Q0608021M-AAMI
BCG Luxembourg Holding S.a r.l. - 2003 2412 999 The Boston Consulting Group Luxembourg S.a r.l. -Tax number not yet available
Dear Mr Kohl, We refer to our meeting of December 3, 2008 and to our letters dated 3 July 2003 (RBS/SBT/AAMI/Q0603004M-KNCN), 30 July 2003 (RBS/SBT/AAMI/Q0603008MKNCN) and 14 February 2005 (RBS/AAMl/HEBN/Q0605003M-CNHT) regarding the Luxembourg companies of the Boston Consulting Group.
A
Description of operations
A.1 Background 1
Boston Consulting Group (hereafter "BCG") is among the largest international business-consulting groups in the world, with 66 offices in 38 countries.
2
The group is already present in Luxembourg through BCG Holdings SCS, BCG Luxembourg Holding S.a r.l. and BCG Holding S.a r.l ..
3
Further to previous restructuring (please refer to our letters dated 3 July 2003, reference RBS/SBT/AAMI/Q0603004M-KNCN, 30 July 2003, reference RBS/SBT/AAMI/Q0603008M-KNCN, and 14 February 2005, reference RBS/AAMI/HEBN/Q0605003M-CNHT), BCG Luxembourg Holding S.a r.I. (hereafter "Big Luxco") entered into a Credit Facility Agreement (hereafter "the CFA") with BCG Holdings SCS for a amount of approximately EUR 770 Mio.
R.C.S. Luxemtx>urg B 65 477 ·TVA LUl756444713
f'R/cEWAIERHousE(roPERS I 4
The participations in BCG Holding GmbH (hereafter "BCG Germany"), BCG SAS and BCG Ireland as well as notes receivables due by BCG Germany ("German Note") and BCG SAS ("French Note") have been sold by BCG Holding Group SCS to Big Luxco against the CFA, Big Luxco being in a back to back position for its financial assets.
5
For your convenience, please find below the current simplified organization chart of the BCG Group: BCG Holding Corp US
The German Note BCG Holding GmbH BCG France
BCG Holding Sari
A.2
Facts
6
Big Luxco intends to transfer the French note and the participation in BCG SAS to a new Luxembourg subsidiary ("New Luxco") through the following steps: Step 1: Big Luxco fonns New Luxco. Step 2: Big Luxco transfers BCG SAS to New Luxco in exchange for shares and the French Note against preferred equity certificates (hereafter "the PEC'').
7
Therefore, the PEC will finance the acquisition of the French Note at the level of New Luxco and the latter will be in a back to back position.
(2)
8
Big Luxco will enter into a tax unity with New Luxco as from FY 2009.
9
For your convenience, please find attached a simplified organization chart of the BCG group after the contemplated restructuring (please see Appendix 1).
B
Applicable tax regime
B.1 L uxembourg tax residency 10
New Luxco will have its statutory seat in Luxembourg. Moreover, New Luxco will have its place of central administration in Luxembourg since its shareholders' meetings and its board meetings will be held in Luxembourg, that the main management decisions will be effectively taken in Luxembourg and that its accounting will be done in Luxembourg.
11
Consequently, New Luxco will be considered to be Luxembourg tax resident w ithin the meaning of article 159 of the Luxembourg income tax law ("LITL") and within the meaning of the double tax treaties concluded by Luxembourg. Luxembourg tax residency certificates will therefore be delivered by the Luxembourg tax authorities upon request.
B.2
Preferred Equity Certificate (PEC)
8.2.1 Characterization of the PEC 12
The PEC will be regarded as debt for both corporate income tax purposes and net wealth tax purposes and the interest accrued on it will be fully deductible.
13
As a high level summary of the PEC's terms and conditions please see Appendix 2.
14
Given the aforementioned characteristics of the PEC, the yield will be falling out of the scope of article 146 (1) 1, 2 and 3 LITL.
15
Furthermore, since there is no intention for the parties to create a silent partnership and no intention to establish a company in the sense of article 1832 of the civil code, the yield on the PEC will be falling out article 146 (2). With regard to article 146 (3), the PEC does not entitle the holder to the distributable profit of the issuer, hence article 146 (3) docs not apply in the case at hand.
16
As a consequence, any interest New Luxco shall pay under the PEC will not be subject to Luxembourg withholding tax and it will be fully deductible for corporate income tax and municipal business tax.
(3)
17
Moreover, the interest paid by New Luxco on the PEC will not be reclassified as dividend payments for corporate income tax and municipal business tax pursuant to either articles 164 (2) or 164 (3) LITL and it will not be subject to wit.W"'>1.W1l)4l11> ~~~ with regard to article 146 (l) LITL. ,;.~
;e~
~
0
B.3 18
19
Share for share exchange (article 22bis)
~~
