Profit-Participating Loans in International Tax Law

Abstract

The article analyses the tax classification and tax treatment of profit participating loans (PPL) in international tax law. In order to analyse the tax aspects of PPL, the commercial and economic background is provided. Following this, a comparative overview of the tax law classification in the United States and Germany and an in-depth analysis of the tax classification and treatment in Danish law are provided. Next, the article analyses whether payments under PPL fall under the scope of the EU corporate tax directives and also considers the income tax treaty protection of payments under PPL.