The European response to the financial crisis and the budget difficulties of certain European Union (“EU”) Member States has included significant tax reforms, many directly or indirectly impacting private equity groups operating in the EU. These changes include revisions to rules on thin capitalization and the deductibility of interest payments. Efforts are also underway to harmonize EU tax rules, in particular between France and Germany.
This memorandum reviews the main developments implemented in 2011 and, in some cases, anticipated for 2012 to the corporate tax laws and certain personal tax laws of the EU and the major EU Member States (i.e., France, Germany, Italy and the U.K.) that may be of interest for the private equity industry.
