The disputes centered on whether the “UKR Loan B.V.”’s acquisition of loans from a bank for €1, which had originally been granted to a Ukrainian company, that was later acquired by SA B.V for €1, should be regarded as genuine loans or sham loans under tax law.
Judgment
The court found that the loans, despite being acquired for a symbolic €1, retained their legal character as civil-law loans with a repayment obligation. It rejected “UKR Loan B.V.”’s argument that they were effectively equity-like contributions and concluded that the repayments received were taxable income rather than capital repayments covered by the participation exemption. The appeals were declared unfounded, and the assessments upheld.
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