Modifications to participation exemption regime

The Finance Amendment Law for 2005 has modified certain rules applying to the participation exemption regime. Details of the changes, which apply from 1 January 2006, are summarized below.

Background

A 95% participation exemption is optionally available for resident parent companies in respect of dividends received from their resident and non-resident subsidiaries. To qualify for the regime, the parent company must hold at least 5% of the shares and the voting rights of a subsidiary fo…