Germany: 138. Recent Court Decisions On Abuse Of Law And Treaty Shopping

Last Updated: 8 July 1998
KPMG Germany Webpage
Click on the above link to visit the KPMG Germany webpage on the Mondaq website
1. Introductory
2. "Monaco" decision overruled
3. IFSC decisions by the Tax Court of Baden-Wuerttemberg
3.1 Statement of facts
3.2 Court's principal holding and grounds thereof
3.3 Other issues addressed by the court
3.3.1 Relationship of sec. 42 AO to EU law
3.3.2 Relationship to the International Taxation Act
3.3.3 Non-tax reasons rejected by the court
3.4 Possible alternative grounds of the decision
4. Treaty shopping decision of the Federal Tax Court
4.1 Statement of facts
4.2 Highlights of the court's holding
4.2.1 sec. 42 AO not inapplicable by reason of tax treaty
4.2.2 Rule shopping vs. treaty shopping
4.2.3 Application of sec. 42 AO to non-resident persons
4.2.4 No preclusion of sec. 42 AO by sec. 50d (1a) EStG for years prior to 1994
4.2.5 Relation of sec. 42 AO to sec. 50d (1a) EStG
4.2.6 Criteria of application of sec. 42 AO
5. Conclusions

For disclaimer and copyright see end of this article.

In article no. 119, we reported on a recent Federal Tax Court decision (IStR 1998, 113 - 27 August 1997) applying the general anti-abuse provision of German tax law, sec. 42 AO (Abgabenordnung or tax procedure act). The present article expands upon the same subject by commenting on two tax court decisions currently on appeal to the Federal Tax Court and on a second recent decision by the Federal Tax Court itself. The Federal Tax Court decision poses various treaty shopping issues.

1. Introductory

German tax law contains a general anti-abuse provision in sec. 42 AO, which reads as follows:

"The tax laws may not be circumvented by abuse of legal structuring possibilities. In case of [such] abuse, the tax claim [of the tax authorities] is the same as that arising under a structure appropriate to the economic transaction."

The vagueness of the statute makes it difficult for taxpayers and tax authorities alike to know when it will apply. Obviously, a structure cannot be "abusive" in the sense of the law just because it was preferred over another structure which would have resulted in greater tax liability. Over the years, the courts have tended to regard structures as abusive if they are unusual (artificial, contrived) and serve no sound business purpose.

The decisions here reported on may be indicative of new court sanction for a broader interpretation of sec. 40 AO than has hitherto been permitted. Two stem from the Tax Court of Baden-Wuerttemberg and concern Irish International Finance Service Centre (IFSC) companies, the other was rendered by the Federal Tax Court with respect to withholding tax on payments to foreign athletes.

2. "Monaco" decision overruled

The Federal Tax Court handed down a decision in 1982 which held, or was at least interpreted as holding, that sec. 42 AO applied only with regard to corporations ( such as functionless "mailbox" companies) interposed by domestic taxpayers (BFH BStBl II 1982, 150 "Monaco"). This decision has now been overruled by the Federal Tax Court (IStR 1998, 113 - 27 August 1997, reported on in article no. 119, and BFH BStBl II 1998, 235 - 29 October 1997, reported on below). Under these decisions, the anti-abuse provision is equally applicable to companies interposed by foreign taxpayers liable to tax in Germany on German source income. Nevertheless, certain differences arguably still remain between domestic and foreign taxpayers regarding the manner of application of the anti-abuse clause (see below sec. 4.2.6).

3. IFSC decisions by the Tax Court of Baden-Wuerttemberg

The two decisions by the Tax Court of Baden-Wuerttemberg, both dated 17 July 1997, have been appealed to the Federal Tax Court. They are known as the "Ireland I" and "Ireland II" decisions (IStR 1998, 629 and 758 and IWB Nr. 17 of 10 Sept. 1997 - Fach 3a Gruppe 1 p. 629 ff.). Ireland II is also published in EFG 1997, 1204 .

3.1 Statement of facts

The facts of Ireland I and Ireland II are similar and may be stated (in simplified form) as follows: Together with others, a German parent corporation formed an Irish subsidiary located in the International Finance Service Centre (IFSC) in Dublin. The Irish subsidiary was licensed by the Irish authorities as a registered IFSC company. In the years at issue, 1990 and 1991, the Irish subsidiary qualified for a reduced rate of Irish corporation tax (10 % instead of 40 % or 43 %) under the Irish IFSC subsidy scheme, the purpose of which is to create jobs in Dublin in the international financial services sector. The business purpose of the subsidiary was the investment of funds in international finance markets. The subsidiary had a board of directors, but no premises of its own and only a couple of part-time employees. The subsidiary entered into management contracts with other financial service companies (also IFSC companies), and the management service provider managed its assets, as it did those of various other similar companies. In the case of Ireland II, the court emphasised that the German parent corporation was a large German insurance company which independently managed DM 15 billion of investments in addition to the sums invested through its IFSC subsidiary.

3.2 Court's principal holding and grounds thereof

The court held that interposition of an IFSC subsidiary was in both cases (Ireland I and II) abusive within the meaning of sec. 42 AO and that German tax was therefore to be imposed as if the German parent had invested its capital directly through the Dublin financial services market, in effect, as if the German parent had contracted directly with the Dublin management service provider. The income from the investments was therefore to be attributed to the parent as interest income taxable in Germany under Germany's tax treaty with Ireland. The court did, however, allow deduction of the expenses associated with the abusive structure, stating that they were equivalent to the expenses which would have arisen if the German parent had contracted directly with a Dublin asset management service provider. The court also allowed deduction of the 10 % Irish corporation tax paid by the IFSC subsidiary, although this was obviously not an expense which would have arisen under a direct investment.

The decisions rest on the court's finding that the interposition of the IFSC subsidiary was motivated solely by tax considerations and not supported by any non-tax purpose. In view of the slight degree of substance in and the minimal activities conducted by the Irish subsidiaries, the cases did not sharply pose the important issue of whether significant substance (employees and premises) and independent economic activity will shield a corporation from attack as abusive if non-tax motivation ("economic or other relevant reasons") is lacking.

The decisions are also not entirely clear as to the significance of the management service contracts. While one of the casenotes for Ireland II suggests that such "outsourcing" is positively damaging at least with regards to securities investment activities, the grounds of the decision itself seem to state no more than that activities conducted by an asset management company on behalf of an interposed subsidiary are not sufficient to prevent application of sec. 42 AO when no non-tax purpose for interposition of the subsidiary can be demonstrated.

In his interesting comments on Ireland I (IWB Fach 3a Gruppe I pp. 632 ff. at p. 634), Dr. Horst-Dieter Hoeppner, a senior official in the Federal Office of Finance (Bundesamt fuer Finanzen) argues that the trend of Federal Tax Court case law is towards requiring both "economic or other relevant [non-tax] reasons" for interposition of a subsidiary and substance in the interposed company (significant economic activity of its own). In his view, no amount of substance or independent economic activity can save a structure from being abusive if a legitimate non-tax purpose (which need not be the sole purpose) is lacking.

It is, however, by no means clear that the Federal Tax Court will endorse this position (see comments on Federal Tax Court decision in sec. 4 below).

3.3 Other issues addressed by the court

Other major issues addressed by the court in Ireland I and II are summarised briefly below:

3.3.1 Relationship of sec. 42 AO to EU law

The taxpayer raised various defences under EU law which the Federal Tax Court will certainly confront again on appeal. The lower court's holdings were as follows:

  • The German anti-abuse provision of sec. 42 AO is not pre-empted by a general unwritten EU anti-abuse clause.
  • The approval given by the EU Commission under Article 93 of the EC Treaty to the Irish IFSC tax subsidy scheme does not immunise the interposition of an IFSC company from review under sec. 42 AO. The court did accord some weight to this issue, however, and was at pains to show both that the type of investment here involved did not further the governmental objectives of the IFSC scheme and that application of sec. 42 AO on a case-by-case basis would not completely negate the legitimate effect of the subsidy scheme, because other corporations, e.g. with more substance, could still be interposed without posing abuse issues under sec. 42 AO.
  • Application of sec. 42 AO does not violate the taxpayer's freedom-of-establishment rights under Articles 52, 58 of the EC Treaty.

3.3.2 Relationship to the International Taxation Act

The taxpayer argued that the International Taxation Act (AStG) took precedence over sec. 42 AO with respect to the taxation of the income of interposed corporations and that the AStG in force for the years in question (prior to 1992) in conjunction with the Irish tax treaty did not provide for taxation of the passive investment income here involved. The court held that sec. 42 AO has logical priority over the International Taxation Act. If sec. 42 AO is applicable to a particular tax structure, then this structure is disregarded pursuant to sec. 42 AO without reaching the secondary question of applicability of the International Taxation Act. This approach is supported by the decisions of the Federal Tax Court (BStBl II 1992, 1026 and 1029 - decisions of 23 October 1991 and 10 June 1992).

3.3.3 Non-tax reasons rejected by the court

The taxpayer advanced the following non-tax reasons for interposition of the IFSC company, all of which were rejected by the court:

  • Improvement of balance sheet of parent company by avoiding mark-to-market accounting for securities purchased directly or through investment companies.
  • Access to the special know-how of the Dublin financial markets in general and that of the interposed subsidiary's board of directors in particular.
  • There was some argument on the yield expected from investment through the interposed subsidiary as opposed to the yield on a direct investment or the yield on investment from Germany. While the facts are not completely clear on this point, the taxpayer was apparently not able to make a convincing showing of any economic advantage of the chosen structure.
  • The court was not convinced by argument that the chosen structure avoided certain organisational and bookkeeping problems.

3.4 Possible alternative grounds of the decision

Particularly with regard to Ireland II, the court stated that the facts were such that its decision might have rested on sec. 39 (2) AO, which reads in pertinent part, "property held in fiduciary capacity is to be attributed to the principal". Under this legal theory, the interposed IFSC corporation would be regarded as the fiduciary (straw man) of the German parent and attribution of the assets of the IFSC subsidiary to the parent would follow under sec. 39 (2) AO. The court expressly declined to rule on this issue since it reached a similar result under sec. 42 AO.

4. Treaty shopping decision of the Federal Tax Court

4.1 Statement of facts

In its decision of 29 October 1997 (BStBl II 1998, 235), the 1st Panel (I. Senat) of the Federal Tax Court was called upon to decide the appeal taken by a Dutch limited liability company (BV) against denial of an exemption from withholding tax on certain payments connected with athletic events held in Germany. The Dutch BV was under contract to the German athletic event organiser to provide foreign resident tennis players for tennis tournaments and render certain other services, in particular to arrange television broadcasting. Under Dutch law, the income of the BV from the German sporting events would have been subject to less than 3 % tax. Its postal address was identical with that of a large number of other companies. The BV had no permanent employees of its own in the years at issue (1988 and 1989). It apparently did have some limited term employees and freelance employees. The BV was closely related to two other similar Dutch companies, all of which were ultimately owned by the same individual.

4.2 Highlights of the court's holding

The Federal Tax Court remanded to the lower court (tax court) for further findings. It indicated that it would uphold denial of the withholding exemption certificate on the grounds that interposition of the Dutch BV was abusive under sec. 42 AO if the BV was in effect a vehicle for avoidance of German withholding tax by the foreign athletes engaged by the BV, who would not have been entitled to a withholding exemption if they had contracted directly with the German event organiser. To make this determination, more information was needed on the relationship of the athletes to the BV. If interposition of the BV were abusive, the income in question would be attributable directly to the foreign athletes involved. The highlights of the decision are as follows:

4.2.1 Sec. 42 AO not inapplicable by reason of tax treaty

The court held that the tax treaty with the Netherlands did not preclude application of German domestic law to determine to whom the income in question was to be attributed. Attribution of income, the court stated, is an issue not addressed by tax treaties as a basic matter and hence remains fully subject to domestic law unless the tax treaty contains specific anti-abuse provisions. The decision does not discuss the relationship of sec. 42 AO to such specific treaty provisions, however. In a lengthy article on the instant decision, Fueger/Rieger (IstR 1998, 353, 355 ff. and footnote 26) argue, however, that specific treaty provisions pre-empt sec. 42 AO unless the context indicates a contrary intent. They note, however, that the point is moot with respect to most German tax treaties as only a few (such as those with the United States and Switzerland) contain anti-abuse provisions.

4.2.2 Rule shopping vs. treaty shopping

A distinction is to be drawn between a structure chosen to confer the protection of a particular tax treaty or the EU Parent-Subsidiary Directive on a taxpayer (treaty or directive shopping) and a structure selected by a taxpayer already entitled to the protection of a particular treaty in order to manipulate the applicable provisions of that treaty (e.g. to convert business profits into interest income). The latter practice is known as "rule shopping".

Fueger/Rieger argue that, while sec. 42 AO is generally applicable to treaty shopping (see preceding subsection), rule shopping is generally to be dealt with within the closed framework of the tax treaty in question. In their view, application of national anti-abuse clauses in only permissible to the extent of any overlap between the domestic anti-abuse provisions of the two countries involved and/or to the extent the terms of the treaty tacitly or expressly so permit.

4.2.3 Application of sec. 42 AO to non-resident persons

As explained under section 2 above, the court overruled its prior "Monaco" decision and held sec. 42 AO to be applicable to corporations interposed by foreign persons as well as by domestic persons. The fact that the tennis players in question were not German residents thus did not prevent sec. 42 AO from operating.

It is also noted that the tennis players in question were apparently not shareholders of the interposed BV. Fueger/Rieger argue that a relatively high level of personal involvement by the third party athletes is necessary in order for sec. 42 AO to operate with regard to them.

4.2.4 No preclusion of sec. 42 AO by sec. 50d (1a) EStG for years prior to 1994

Sec. 50d (1a) EStG was added to the income tax law with effect from 1994 onwards. It is an anti-treaty-shopping provision denying treaty benefits to foreign corporations to the extent they are owned by persons not themselves entitled to the benefit being claimed if no "economic or other relevant reasons" exist for interposition of the foreign corporation and it does not engage in independent economic activity (double requirement).

The court implied that sec. 50d (1a) EStG was merely declaratory in nature. At any rate, it refused to infer from the enactment of this amendment that a similar result could not be reached under sec. 42 AO prior to the entry into force of the anti-treaty shopping provision. Since the criteria under sec. 42 AO are very similar to those under the anti-treaty-shopping provision, the court would appear to be saying that sec. 50d (1a) EStG is superfluous.

4.2.5 Relation of sec. 42 AO to sec. 50d (1a) EStG

There is a double irony to the court's holding As Fueger/Rieger point out, the enactment of sec. 50d (1a) EStG as a specific anti-treaty-shopping statute was motivated by the Monaco decision which the Federal Tax Court has now overruled. Because of the Monaco decision, the tax authorities did not believe that sec. 42 AO could be used to prevent treaty shopping by foreign persons. However, it now develops, 15 years after the Monaco decision, that sec. 42 can be used against such structures after all.

Furthermore, in drafting sec. 50d (1a) EStG, the tax authorities relied on older holdings of the Federal Tax Court on sec. 42 AO in which disregard of foreign corporations interposed by domestic persons was made contingent on the same double requirement found in sec. 50d (1a) EStG : lack of "economic or other relevant reasons" for interposition of the foreign corporation and failure to engage in independent economic activity. However, a controversial 1992 holding by the 8th Panel (VIII. Senat) of the Federal Tax Court (BStBl II 1993, 84 - 28 January 1992) (respecting a foreign corporation interposed in a low-tax jurisdiction by domestic taxpayers) had abandoned the second requirement and thus considerably expanded the scope of application of sec. 42 AO. This decision may rest on the theory that interposition of a corporation in a low-tax jurisdiction raises a rebuttable presumption of abuse. It is currently unclear whether the 1st Panel will follow the holding of the 8th Panel or not.

Fueger/Rieger argue, however, that sec. 50d (1a) EStG pre-empts sec. 42 AO from 1994 on. In their view, for which they adduce persuasive arguments, sec. 50d (1a) EStG codifies ("freezes") Germany's anti-treaty shopping case law in its pre-1992 state and thus prevents application of the 1992 decision by the 8th Panel to such cases.

If they are right, sec. 50d (1a) EStG would turn out to be not only superfluous (because sec. 42 AO was applicable to foreign persons all along), but also protective of treaty shopping (because, assuming it pre-empts sec. 42 AO from 1994 on, it prevents application of the 1992 decision by the 8th Panel of the Federal Tax Court to treaty shopping).

An opposing view regards sec. 42 AO and sec. 50d (1a) EStG as cumulatively applicable from 1994 on.

4.2.6 Criteria of application of sec. 42 AO

The court repeats its consistent holdings that a structure is abusive under sec. 42 AO if it is "inappropriate" to achieving the desired economic result, intended to reduce taxes, and not justified by "economic or other relevant non-tax reasons". It further states that the presence or absence of independent economic activity on the part of the interposed corporation is a "weighty indication" (gewichtiges Indiz) of the presence or absence of an "appropriate structure" and "economic or other relevant non-tax reasons". The court would thus appear to have come close to saying that a corporation with considerable substance and economic activity is seldom, if ever, to be disregarded as abusive under sec. 42 AO, at least when it is interposed by foreign persons. The court further states that the relevant level of economic activity must include assumption of entrepreneurial risk and transcend mere "administrative and legal actions".

The 1st Panel thus appears to distance itself from the 1992 decision by the 8th Panel, without, however, placing itself in open contradiction to the earlier holding.

This holding by Germany's highest tax court is not in accord with the position advocated by Hoeppner (see above sec. 3.2). Hoeppner, who is a senior official in the Federal Office of Finance which denied the withholding exemption at issue in the instant case, accordingly takes issue with this aspect of the court's decision (IWB Fach 3a Gruppe 1 p. 658).

Fueger/Rieger argue that the level of economic activity engaged in by a foreign corporation interposed by foreign persons remains a decisive criterion under sec. 42 AO. Hence, they believe that the 1992 decision by the court's 8th Panel cannot be applied in such cases irrespective of whether sec. 50d (1a) EStG pre-empts sec. 42 AO from 1994 on. They focus upon the court's comments with regard to who bears the entrepreneurial risk of an activity and contend that this is the essential test. Fueger/Rieger also contend that the 1992 decision by the 8th Panel is appropriate only to foreign corporations interposed by domestic persons because the presumption of abuse with regard to interposition of corporations in foreign low-tax jurisdictions is only valid with regard to domestic taxpayers. Thus, even though the Monaco decision (as it was popularly understood) has been overruled, an important distinction would still remain between foreign and domestic persons with regard to the application of sec. 42 AO.

5. Conclusions

As the cases discussed above indicate, Germany's courts are showing increased willingness to apply the general German anti-abuse provision (sec. 42 AO) against aggressive tax structures chosen both by resident and non-resident taxpayers. Still very much in doubt, however, is whether a corporation with significant substance and independent economic activity can be disregarded as abusive even if its interposition was solely tax-driven. The lower court decisions Ireland I and II pose interesting issues of European law and may be reversed by the Federal Tax Court on these grounds. Lying dormant in the cases discussed is also an alternative legal theory (sec. 39 (2) AO - fiduciary relationship) which may become a new prong of the tax authorities' attack against aggressive tax structures. Finally, while the holding of the Federal Tax Court under Germany's anti-treaty shopping provision in force from 1994 on may encourage the tax authorities to use sec. 42 AO against treaty shopping for years prior to 1994, there is reason to believe that sec. 42 AO is not applicable to such cases from 1994 on. In this event, sec. 50d (1a) EStG may turn out to shield treaty shopping against the more radical interpretation of sec. 42 AO espoused by the 8th Panel of the Federal Tax Court in its above-discussed 1992 decision

Disclaimer and Copyright
This article treats the subjects covered in condensed form. It is intended to provide a general guide to the subject matter and should not be relied on as a basis for business decisions. Specialist advice must be sought with respect to your individual circumstances. We in particular insist that the tax law and other sources on which the article is based be consulted in the original, whether or not such sources are named in the article. Please note as well that later versions of this article or other articles on related topics may have since appeared on this database or elsewhere and should also be searched for and consulted. While our articles are carefully reviewed, we can accept no responsibility in the event of any inaccuracy or omission. Please note the date of each article and that subsequent related developments are not necessarily reported on in later articles. Any claims nevertheless raised on the basis of this article are subject to German substantive law and, to the extent permissible thereunder, to the exclusive jurisdiction of the courts in Frankfurt am Main, Germany. This article is the intellectual property of KPMG Deutsche Treuhand-Gesellschaft AG (KPMG Germany). Distribution to third persons is prohibited without our express written consent in advance.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.