- conditions for “controlled foreign company”:
- more than 50% of capital control, voting rights, profit entitlement
- less than 50% taxed of parent company
- more than 1/3 of subsidiary is passive
- Effect: CFC is taxed as if parent made profit
- no need for dividend distribution
- exemption: valid commercial reasons
- Cadbury Schweppes carve out for “genuine economic activities”
- respect EU fundamental freedoms (freedom of establishment)