Double non-taxation is causing concern to the European Commission who regards it in the same light as double taxation as contradicting the very spirit of the single market. The European Commission is conducting a survey to see what can be done about treaty-shopping through low-tax jurisdictions.

At the moment one can only speculate about how the EU will tackle this measure but the United States approach is based upon conduit financing regulations and limitation of benefit provisions. The latter is particularly seen in the re-negotiating US/Netherlands Double Taxation Treaty of 1996.

This matter is written up by Roy Saunders in the IFS Consultants Newsletter of January 2012. Under the EU-produced measures, any changes will certainly affect the use of trusts and foundations to hold intermediate companies.