Way over my head!

Dear Sirs,

In order to have a more efficient group structure and create synergy effects it is currently discussed to merge the German holding company ***** into its Austrian shareholder,*****. Since the shares in the local group companies based on such transaction would legally be transferred from the German holding to the Austrian holding, before further planning and execution of the transaction we would like to clarify the tax and legal consequences in your countries.

Therefore, we kindly ask you to carefully answer the below questions and if necessary clarify the tax and legal consequences with your local tax and legal advisor:

1. Will there be any tax consequences upon the transfer of the shares in your local company by merger between the two holding companies? Such consequences e.g. might be
• Loss of losses carried forward
• Registration duties
• Real estate transfer tax
• Fictitious profit distribution upon the merger
• Realisation of hidden reserves/taxation of a capital gain (Generally a capital gain under tax treaties should be taxable for the transferring shareholder so that there should not be tax consequences in your countries)
• Loss of interest carry forwards

2. Would there be a difference in tax consequences if the shares are transferred to Austria or if there remains a permanent establishment of the Austrian holding in Germany to which the shares in your company are allocated?

3. Will there be different tax consequences for future profit distributions, since in the future they might be made to the Austrian holding as shareholder and no longer to the German holding?

4. Will there be a different tax consequence for interest payments to an Austrian shareholder instead of a German shareholder?

5. Will there be any legal consequences. Such consequences e.g. might be
• Registration requirements of the new shareholding
• In case according to the laws of your country it is required to have at least two shareholders, please indicate the legal consequences, if by merger the shares will be consolidated with one shareholder. Will it be necessary to transfer minimum shares to another shareholder than the Austrian holding before or at the same time the merger is executed?

6. Are there any other aspects or concerns to consider?

Can anyone help with this???