Tax

Tax-related issues arising in banking and commercial finance can be deceptively complex for both financer and borrower. The consequences of getting them wrong are significant.

Fail to properly analyze cross-border withholding taxes, and you, as the lender, could see your profit wiped out; or if you’re the borrower, you may find your financing costs increase by 20 percent and more. Make an error on the finance lease, and the additional tax costs can be painful for both lessor and lessee. Belatedly identify tax leakage in the structured derivative you entered into, and you may find yourself going over the hedge.

As governments across the globe rapidly look to increase revenue and influence behavior through general anti-avoidance rules, worldwide debt caps and extra-territorial taxes, Prinslaw Associates will be ahead of the curve in every jurisdiction, working with you to manage, minimize and align your tax risk consistently with your tax strategy, from acquisition to asset finance, securitization to Shariah-compliant structures.

Experience

• Capital Power: Advising on financings, which have a combined value of US$995 million, specifically a US dollar note issue by Capital Power US Financing L.P., as issuer, and guaranteed by Capital Power L.P., as parent guarantor, pursuant to which US$230 million 5.21% Series A senior guaranteed notes and US$65 million 5.61% Series B senior guaranteed notes were issued, and the amendment and restatement of the senior syndicated credit facilities of Capital Power L.P. for US$700 million. The amendment and restatement included the addition of Capital Power (US Holdings) Inc. as US borrower.
• COMESA: Advising on the establishment of a pan-African infrastructure fund.
• Deutsche Sparkassen - und Giroverband (DSGV): Advising S-Finanzgruppe, represented by Deutsche Sparkassen - und Giroverband in connection with the acquisition of DekaBank. The German Savings Banks have taken on 50 percent of the stakes previously held by the Landesbanken (Federal State Banks) at a purchase price of €2.3 billion. Until then, the Savings Banks and the Landesbanken owned 50 percent each of DekaBank. The Savings Banks pay €1.3 billion of the purchase price. DekaBank repurchases shares from the Landesbanken for about €1.0 billion covered by its equity capital.
• Energy company: Advising on the tax aspects of the development of a greenfield sugarcane plantation, the construction of an ethanol refinery and a biomass fuelled power plant, including negotiating a tax incentives agreement with the Government of Sierra Leone.
• ESI Group: Advising this global provider of prototyping software on their acquisition of venture backed ICIDO GmbH, a leading provider of virtual reality software solutions.
• Family offices and ultra high net worth individuals: Acting for a number of clients providing tax advice on international investments, global portfolio structuring, yacht and jet leasing and acquisitions.
• Large International bank: Advising a prominent international bank on a cross-border transfer of a leasing portfolio as part of the disposal of its non-core aviation arm. We drew upon our experience in cross-border leasing taxation and our creativity in resolving issues resulting from the interaction between tax systems to advise on the UK tax and value added tax aspects of the acquisition of the portfolio, negotiate amendments to the documentation and coordinate the highly intricate international tax aspects of the transaction.
• Private banks: Advising on lending to ultra high net worth individuals, including Shariah compliant structures and personal jet and yacht financing.
• US Gold Corporation: Advising on its acquisition of Minera Andes Inc. by plan of arrangement with a transaction value at the time of closing of approximately CA$1.4 billion for the combined company, which was renamed McEwen Mining Inc. This transaction was highlighted as a “Big Deal” in LEXPERT's April 2012 issue.
• WestLB: Advising a major German bank on a spin-off transaction concerning a bank with €40 billion in assets and 400 employees and involving a €1 billion share capital increase half-contributed by a bank which we advised on tax and corporate structuring aspects. The spin-off will act as a service unit for the savings banks (Sparkassen) located in the state of Nordrhein-Westfalen. Hessische Landesbank will take over the shares in the spin-off. In order to fund the transaction, Hessische Landesbank went through an increase in share capital amounting to €1 billion. Part of the capital increase (€500 million) was contributed by Deutscher Sparkassen und Giroverband (DSGV), who we advised on the tax and corporate structuring of the transaction.

Resource and extractive industries are often a target for tax systems and administrations. Many countries have special tax rules that favor or disfavor particular resources and activities. Tax treaties, changing royalty regimes, and exploration and development tax incentives are just some of the challenges natural resources companies face in today’s global marketplace. To be fully equipped to deal with these issues when they arise, you need innovative, pragmatic tax planning.

Draw on the experience of the lawyers at Prinslaw Associates. We help domestic resources companies, foreign resources companies, investors and lenders plan and structure projects and transactions for tax efficiency and maximum returns. As veterans in the field, we’ve participated in the evolution of resource tax laws, and written definitive publications—we know what the problems have been historically, what the solutions are for you today, and what will work for you in the future.

For business structures involving corporations, branch operations, joint ventures, trusts, income funds, partnerships and other structures, work with us. Leverage our vast experience in inbound and outbound transactions, property acquisitions and project development, corporate mergers, acquisitions and reorganizations, and resource transactions, including those involving renewable energy. We know the domestic tax rules, and we know how best to take advantage of tax treaties.

Experience

• Berlinwasser International AG: Advising on the sale of their share in Berlinwasser China Holding Limited (BCH); BCH operates several wastewater disposal systems in China. The acquirer of the shares is the former majority shareholder Metito Utilities China Holding Limited. Berlinwasser International AG is a 100 percent subsidiary of Berlinwasser Holding AG, a company held by the federal province of Berlin as well as RWE and Veolia. The Dubai-based Metito is a leading provider of intelligent water management solutions in emerging markets.
• Multinational oil company: Advising on the sale of Natural Gas Liquids (NGL) business to Plains Midstream Canada ULC, a wholly owned subsidiary, for $1.67 billion. This is the most recent of several billion-dollar-plus transactions where Prinslaw Associates has partnered with the oil company. The NGL business owns, operates and has contractual rights to assets that run the gamut of production and distribution functions, from extraction though to wholesale distribution of NGL products across Canada and in the Midwest United States. Among the assets, for example, are approximately 4,000 kilometers of pipeline systems and a storage capacity of 21 million barrels of NGLs.
• Energy company: Advising on the tax aspects of the development of a greenfield sugarcane plantation, the construction of an ethanol refinery and a biomass fuelled power plant, including negotiating a tax incentives agreement with the Government of Sierra Leone.
• Grant Forest Products Inc.: Acting as counsel on the CCAA and US Bankruptcy Court approved acquisition of its oriented strand board facilities in Ontario and South Carolina, US by Georgia-Pacific LLC for US$400 million.
• Premier Gold Mines: Advising with respect to its CA$104 million acquisition of Goldstone Resources Inc. The acquisition consolidates 100 percent ownership of the Hardrock Project in Canada that is host to a multimillion-ounce National Instrument 43-101 compliant resource estimate.
• PSE Operator: Advising on the €120 million acquisition of a power interconnection between Poland and Sweden (SwePol Link) by PSE Operator (50 percent) and Svenska Krafnat (50 percent). The facilities consist of converter stations in Sternö (Karlshamn, Sweden) and Slupsk (Poland), as well as a submarine pole cable and return cables. The capacity of the link is 600 megawatts. The interconnection was initially operated by special purpose companies and following acquisition by PSE Operator and Svenska Krafnat became an inter-TSO project improving power grid stability in Poland and Scandinavia.
• Sasol Petroleum International: Advising on the CA$1.05 billion acquisition of a 50 percent working interest in Talisman Energy Inc.’s (Talisman) Farrell Creek shale gas assets in the Montney Basin area of northeastern British Columbia, a subsequent transaction with Talisman for similar consideration of CA$1.05 billion, which expanded Sasol’s gas reserves in the area, with a view to the further development of a gas-to-liquids plant to be located in Canada and to serve the North American liquid fuels markets.
• US Gold Corporation: Advising on its acquisition of Minera Andes Inc. by plan of arrangement with a transaction value at the time of closing of approximately CA$1.4 billion for the combined company, which was renamed McEwen Mining Inc. This transaction was highlighted as a “Big Deal” in LEXPERT's April 2012 issue.

Global operations mean global opportunities. But they also mean exposure to taxation by multiple tax authorities, each hungry for revenue in an uncertain global economy. Thoughtful, proactive, sustainable transfer pricing solutions are a necessity as you seek to manage your global tax costs.

Tap into Prinslaw Associates’ many years of experience in assisting companies like yours to plan, implement and defend transfer prices. Our team designs transfer pricing strategies, and we prepare reports that present and document the arm’s-length nature of intercompany prices between related parties. We can represent you in direct negotiations around the world and can help you achieve certainty by obtaining advanced pricing agreements on your behalf. If your company’s transfer prices are challenged by the tax authorities, our Tax Litigation group can help you in defending them, negotiating a favorable settlement, or litigating the matter through the courts.

Whether you’re moving money across the country or around the world, count on our Transfer Pricing team to help you get it there safely.

Experience

• Canadian taxpayer: Advising on a transfer pricing case involving a large Japanese lumber distributor and its Canadian subsidiary in respect of whether the subsidiary was charged a fair market value price for its services, taking into account the CUP and TNMM methods.
• Multinational dairy products corporation: Advising and assisting the second largest dairy products group in the world and the second largest food products group in France on all tax aspects of its acquisition policy across Europe with special focus on the markets in Germany, France and Poland. Among the different specific services, our tax lawyers mainly focused on tax structuring work, an in-depth tax due diligence, financing schemes and Transfer Pricing schemes.
• Europe-based original equipment manufacturer and aftermarket automotive supplier: Advising on the massive refinancing of over $14 billion of debt related to a recent acquisition. We created the most tax advantageous structure for our client and continue to find business oriented solutions for the client in connection with the refinancing of the capital structure, while guiding our client to avoid transfer pricing adjustments, and ensuring regulatory compliance.

While taxation is an unavoidable part of doing business, effective structural and transactional planning can dramatically reduce your liability. The lawyers at Prinslaw Associates are intimately familiar with the array of taxes, unclaimed property laws and tax authorities at the state, county and city levels. Trust us to manage the most complex, potentially costly procedures, from structural and transactional planning to corporate and transactional due diligence, as well as tax and unclaimed property audit representation and litigation.

Our team has experience with every component of business taxation, including:

• Corporate income and franchise taxes
• Unitary and apportionment planning
• Sales and use taxes
• Telecommunications taxes
• Unclaimed property
• High net worth individuals and entertainers
• Residency audits
• Audit representation and litigation
• Real estate taxes
• Tax-exempt status of entities, parcels and products
• Class action refund litigation
• Constitutional adjudication
• Shaping state and local tax policy

If your company is facing a state or local tax audit, our team will actively assist you throughout the process and will litigate any disputes that can’t be resolved favorably. Look to our comprehensive knowledge of local tax regimes and unclaimed property laws to advise you on the location of investment activities and business operations, and the structuring of your business to minimize liability.

From preparation to resolution, Prinslaw Associates is fully equipped to help you understand, minimize and meet your tax obligations at every level.

Experience

• Large common carrier: Acting as local counsel for a large common carrier in very substantial sales tax litigation win in New York state currently on appeal.
• Large Financial Institution:Represent a large financial institution in unclaimed property counseling and in litigation regarding the constitutionality of unclaimed property laws.
• Large multinational information services company: Acting as outside counsel on a diverse array of state and local tax issues, including audits and litigation for a large multinational information services provider.
• US-based wireless company: Serving as outside tax counsel on sizable federal and New York state tax issues for a US-based wireless company. We have partnered with the client to realize substantial tax refunds on a complex communications tax issue impacting the entire wireless industry.
• High Net Worth Individuals: Representing certain high-net worth individuals and entertainers on various audit and residency issues in several states including, New York, New Jersey and California.

A high personal net worth carries a unique set of tax challenges and opportunities. With Prinslaw Associates’ lawyers by your side, we will ensure that you avoid the pitfalls and reap the advantages of efficient personal tax planning.

Consult our savvy, experienced global team for advice on a broad spectrum of domestic and foreign tax matters. Defend your assets against the needless complications and liabilities which can stem from becoming a tax resident of a foreign jurisdiction, or earning compensation outside your home country. Structure your investments and business operations efficiently with the guidance of knowledgeable partners. We are one of the few firms that can offer you a truly global solution to your individual tax needs.

No matter where and how your money is working for you, Prinslaw Associates will protect the fruits of that labor with the most tax-efficient solutions possible.

Experience

• Bank of Tokyo-Mitsubishi UFJ : Representing in connection with a US$400 million syndicated credit facility for CAMI Automotive Inc., a joint venture of General Motors (Canada) Ltd. and Suzuki Motors Co., Ltd.
• Family offices and ultra high net worth individuals: Acting for a number of clients providing tax advice on international investments, global portfolio structuring, yacht and jet leasing and acquisitions.
• High net worth individual: Representing in an IRS administrative appeal. The aggressive efforts of our tax team helped reduce the client's tax deficiency from approximately US$12 million to a mere US$20.
• Canadian taxpayer: Represented the taxpayer (Bozzer v. The Queen, 2011 FCA 186) in the Federal Court of Appeal on a landmark decision successfully challenging the Canada Revenue Agency's restrictive interpretation of the "10 year rule" for cancellation of interest under the Income Tax Act. In November 2011, the Canada Revenue Agency issued a news release confirming that it accepted the interpretation of the 10-year limitation period for interest relief established by the Federal Court of Appeal.
• Polish Ministry of the Environment: Advising on the terms of the Emissions Reduction Purchase Agreement, and general advice on enforceability, and the Kyoto regime. This transaction concerned the sale of assigned amount units (AAUs) issued under the Kyoto Protocol by the Polish Ministry of the Environment to two of the World Bank’s carbon funds: the Spanish Carbon Fund (Tranche 2) and the Carbon Fund for Europe (Window 2). Under the AAU Purchase Agreement, the Polish government agrees to use the proceeds from the sale of AAUs to help increase the energy efficiency of public buildings in Poland, under a Green Investment Scheme.
• Spanish engineering consortium operating: Advising on a joint venture project related to the development of a nuclear power reactor located in France. Our tax teams in Spain and France advised the client on the tax treatment of the joint venture, on the establishment of a branch in France, and on the tax implications for the seconded employees. We successfully dealt with complex CIT liability, VAT, PIT, a double tax treaty between France and Spain, and sophisticated permanent establishment issues. We helped the client to reduce tax burdens by avoiding paying double taxation in France and Spain. We also helped the client organize the arrangements between the members of the consortium.
• Swiss and Liechtenstein professionals: Advising on criminal tax issues arising from their roles as advisors and directors of a qualified intermediary structure.
• Various Canadian clients: Advising on tax concerns with respect to entry into the Middle East and Africa through a European entity, investment with a US partner into a European operating entity and investments into Central Asia and Australia.