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Business restructurings have been a widespread phenomenon in recent years. In tax terminology, restructurings have typically been characterized as the conversion of fully-fledged manufacturers and distributors into contract-manufacturers or toll-manufacturers, and limited-risk distributors or commissionaires. The underlying business reality is broader than that.

At this NERA seminar, held in Barcelona on 4 December 2008, Special Consultant Pim Fris provided an introduction to these types of restructurings and discuss what they may involve, such as the cross-border redeployment of functions, risks, and assets between associated enterprises, and the effects on the profits and loss potential in each country. Mr. Fris specifically placed these restructurings in the context of the OECD Discussion Draft on the Transfer Pricing Aspects of Business Restructuring, released for public comment on 19 September 2008.

In addition, Dr. Alexander Voegele introduced the new German Business Migration legislation, the relevance of which will be emphasized by its anticipated retroactive application. He showed how to achieve the deductibility of these charges in Spain. The new legislation represents the first dedicated regulation with regard to restructurings in the world, and offers particular insights into the thinking of tax authorities.

A description of the main aspects of the new legislation underlying the difference between the previous legislative view and the new regulation was given. In addition, business cases were presented to highlight the relevance of the new German legislation for Spanish affiliates of German groups, as well as for Spanish multinationals with affiliates in Germany.