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Baker McKenzie bolsters tax practice with hire of Stephanie Pantelidaki

Leading global law firm Baker McKenzie has hired Stephanie Pantelidaki as Head of Financial Services Transfer Pricing in the firm’s tax practice. Stephanie joins from PwC, where she has worked in both the firm’s United Kingdom and Switzerland offices.

Stephanie has over twenty years’ experience advising on transfer pricing and international corporate tax issues with a particular focus on financial services – having worked with leading institutions in banking and capital markets, investment management, and the insurance sectors.

She started her career in academia as an economic adviser and research fellow at London Business School, and went on to work for organisations including Andersen, KPMG and Baker McKenzie (2006-2009) where she helped establish the Transfer Pricing team in the London office.

Mark Delaney, head of Baker McKenzie’s tax practice in London, said: “Stephanie is a truly exciting hire for Baker McKenzie. We’re seeing increased demands from financial institutions for transfer pricing works and her skills and expertise will enable us to deliver an even better service for our clients.”

Alex Chadwick, Baker McKenzie’s London Managing Partner, said: “We’re welcoming Stephanie back to Baker McKenzie at a great time, with opportunities in abundance for continued growth across the tax practice. Her experience, crossing academia and finance, mean she will bring a lateral-minded point of view to the team. She’s going to be a fantastic asset to us.”

Stephanie’s hire follows a number of recent significant lateral appointments including Leveraged Finance partner Ben Wilkinson, who joined Baker McKenzie from White & Case, M&A partner Nick Rainsford, who joined from Ashurst, private equity partner Justin Hutchinson, who joined from Kirkland & Ellis, Adam Eastell a partner from Slaughter & May and Nick Bryans, also from Ashurst.

Brazil-Switzerland agreement to avoid double taxation

The text of the Agreement, which had already been approved in Switzerland in 2019 by the Council of States (Ständerat) and the National Council (Bundesrat), was approved in Brazil both in the House of Representatives, on March 5, 2020, and in the Federal Senate, on February 24, 2021, and now depends only on publication by means of a Presidential Decree to start producing legal effects in Brazil.

In its 30 articles, the Agreement regulates some of the main issues involving cross-border tax relations, eliminating uncertainties and distortions and encouraging the flow of investment from individuals and companies between the two countries, among which we highlight:

   a) Inclusion of the following Brazilian taxes (i) IRPJ (Corporate Income Tax); (ii) IRPF (Personal Income Tax), and (iii) CSLL (Social Contribution on Net Profit) – which is expressly provided for in the Agreement – and the recognition on the Swiss side of the inclusion of cantonal taxes in its scope;

   b) Besides aiming to avoid double taxation and possible double non-taxation, and containing a general anti-abuse clause (“Limitation of Benefit or simply LoB Clause”), the Agreement includes both transparent entities (partnerships, trusts) and collective investment vehicles (investment funds);

   c) Although until now dividends have not been taxed at source in Brazil, the Agreement includes a provision that reduces to 10% the withholding tax (IRRF) on dividends paid to the beneficial owner of a company that holds at least 10% of its capital;

   d) With regard to interest, it determines the reduction of the IRRF rate to 10% on interest on loans granted for a minimum term of 5 years, granted by banks for the purchase of equipment and/or investment projects;

   e) Royalties are also now subject to the reduced rate of 10%, except for those arising from the use, or right of use, of industrial and commercial trademarks; and

   f) Technical services were given a specific definition, which no longer includes services of an administrative or scientific nature. The IRRF rate here has also been limited to 10% – lower than the general Brazilian rule, which provides for a rate of 15%;

The tax team of Stüssi-Neves Advogados are following closely the publication by Presidential Decree and are available to answer any questions regarding the Agreement.

Arthur Stüssi Neves
Partner in the Tax Area – Rio de Janeiro
[email protected]

Hogan Lovells strengthens Australia practice

Hogan Lovells is pleased to announce that Paul Shillington will be joining as a partner in the firm’s Finance practice on 11 May 2020, based in the Perth office. Paul has held private practice and executive roles in Switzerland, Paris and Perth, most recently with leading Australian domestic firm, MinterEllison.

Paul is an oil and gas specialist with more than 20 years’ experience acting in the energy and resources sectors on both transactional and regulatory aspects of deals. His practice focuses on providing clients with advice and assistance on asset acquisition and divestment, private M&A, JV arrangements, development activities and the strategic management of associated disputes.

Commenting on Paul’s arrival, Global Head of the Hogan Lovells Finance practice Matthew Cottis, said: “Paul’s arrival represents the latest step in our plan for the building out and strengthening of the Australian practice which is an increasingly important and attractive region for the global energy and resources sector. Paul’s cross-border experience brings enhanced capability to the team supporting both global clients with operations in Australia as well as domestic Australian companies.”

Paul Shillington added: “I am delighted to be joining the Finance practice at Hogan Lovells. The firm’s global footprint and integrated nature provides the ideal platform for me to further develop my practice and service my clients.”

Hogan Lovells Perth

When major corporations, financial institutions, and governments need practical advice on local, regional, and international corporate and financing transactions they turn to Hogan Lovells.

Switzerland vs. COVID-19

Like all other countries, Switzerland has been, and still is, affected by the COVID-19 pandemic.

Cases were as numerous as those in the most affected countries. However, the number of victims is significantly lower, probably because of the quality of the Swiss health care system and better organisation and implementation of government measures.

The Swiss Federal Council (Government) is currently undergoing a gradual exit from the lockdown which will take place in three phases, on 28 April, 11 May and 9 June.

These measures seem all the more credible because containment has never been complete in  Switzerland: non-food stores and pharmacies were closed, as were restaurants, but outside these sectors population was authorised to move and work.

In terms of economy, the closure measures have, as everywhere, caused a great deal of damage and a drop in GDP of approximately 8% is expected in 2020.

This is the result of both the measures taken and the fact that, as the Swiss economy is very integrated with the economies of its neighbours, the loss of purchasing power will be felt in Switzerland.

However, GDP is generally expected to rise by the same amount in 2021, according to projections by most economists.

Assistance measures taken

The federal government and the cantons have also taken measures to support companies and employees.

These compensatory measures include direct aid to companies which had to close or those whose turnover has been significantly reduced, intervention in the payment of commercial rents, loans, loans guaranteed by the public authorities, easier access to temporary unemployment, etc.

It is recognised that these measures have been effective, although they are insufficient to compensate for the losses suffered by businesses. In addition, the Federal Government and the cantons have been very reactive, with aid sometimes being granted within only two or three days.

The future of the Swiss economy

As is the case everywhere, lockdown measures, although not comprehensive, will have medium- and long-term implications.

However, one of the important advantages of Switzerland is that the public authorities were very lightly in debt and therefore have a significantly higher borrowing capacity than most of the other European countries. In addition, the federal budget has been in surplus in recent years, and the state wisely refused to listen to those who recommended the spending of the budget bonus.

Therefore, Switzerland has now a greater capacity to intervene without jeopardising the balance of public finances and without requiring new taxes from taxpayers.

Residence in Switzerland

This is probably one of the reasons why the establishment of a company in Switzerland, or the acquisition of a Swiss residence, is to be recommended today, provided that it corresponds to reality.

There is a concern that some other countries, including in Europe, will take very heavy fiscal measures, either at the end of this year or in the following years, in order to service their very heavy 2020 expenditure incurred.

It is highly unlikely that Switzerland will be forced to take equivalent measures.

It is therefore more than probable that in the coming years there will be additional advantages in establishing in Switzerland, not because of an improvement in the Swiss tax system, but because, compared to that, the taxation of neighbouring countries will be even higher than it is today.

Rödl & Partner advises GS Star on its expansion to Switzerland

Rödl & Partner advised GS Star GmbH (GS Star) on financial, legal and tax matters in the acquisition of two hotels from Turicum Hotel Management Group. GS Star is operated by the holding company Gorgeous Smiling Hotels Holding GmbH, the joint venture of AUCTUS Capital Partners AG and G&E Hotelbeteiligungs GmbH.

A specialised M&A team led by partner Jochen Reis advised GS Star on all financial, legal and tax transaction issues. The financial due diligence was led out by Felix Markowsky, the legal advice by Alex Barbier and the tax advice by Florian Kaiser.

Strategic Potential

The acquisition of the two hotels from Turicum Hotel Management Group is part of the continuous and successful cooperation between GS Star and its franchise partner Intercontinental Hotels Group. The operation also opens a new market for GS Star: The hotels are located in Berne and Zurich with a capacity of 144 and 164 rooms, respectively.

Transaction Parties

Turicum Hotel Management Group was founded in 1993. After the operation, it will continue to operate the 4-star B2-Boutique Hotel + Spa in Zurich.

The management company of GS Star, Gorgeous Smiling Hotels GmbH, is an international multi-brand hotel operator, that acts as a franchisee in the European market for such global brands as Intercontinental Hotel Group, Hilton or Wyndham Hotel & Resorts. The group also focuses on the development of its private labels such as Rilano Hotel & Resorts and Arthotel ANA. The Group has won awards from the Financial Times and Focus Business and is among the top thousand fastest growing companies in Europe. The strong expansion of Gorgeous Smiling Hotels GmbH in the German-speaking countries, the Netherlands and, in the future, Great Britain led to a portfolio of more than 100 properties operating in a wide range of segments.

AUCTUS Capital Partners AG is an independent investment company founded by entrepreneurs. Since its launch in 2001, AUCTUS has already made more than 200 investments. More than 25 platform investments combine a total of more than 50 legal entities, representing total sales of approx. €1bn and total net income of >€50m.

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