Onloan

Where a Dutch company borrows funds from affiliated companies, then, subject to the fulfillment of certain conditions, it is possible to obtain a ruling from the tax authorities that the minimum taxable interest spread will be 1/8 of 1 percent of the funds onloaned.

Similarly, if a related foreign parent borrows from a lender and then onloans the funds to a U.S. subsidiary, the back- to-back loan should be recharacterized as if the U.S. subsidiary had borrowed directly from the unrelated foreign lender.

As noted by Eichengreen (199b:158-9), Korea had liberalized its capital account "entirely backwards," maintaining strict controls on inflows of foreign direct investment, limiting opportunities for foreigners to purchase bonds and equities issued by Korean corporations, restricting the ability of Korean chaebols to borrow on international capital markets, and leaving Korean banks free to borrow abroad and onloan to the chaebols.

The coinsurance provision of Title I became effective October 1, 1954, and from that date the lender is required to bear 10 percent of the loss sustained on any onloan.

The contenders were the Netherlands, Luxembourg, and the United Kingdom, with the Netherlands being the most suitable. A restructuring would have involved the issuer assigning the onloan to a new Dutch subsidiary ...