Appendix 4: Closely-Held Companies: Background Paper for Sessions 6 and 7 of the Tax Working Group

This paper, along with the Secretariat’s paper Dividend avoidance (Appendix 5) discusses the differences in taxation that arise from individuals holding investments in entities rather than directly.  Taxpayers who earn income through a closely-held company (a company with a small number of shareholders) can potentially avoid or defer tax.