The Supreme Court in the Netherlands requested a preliminary ruling from the European Court of Justice to clarify its case-law on, inter alia, the freedom of establishment laid down in Article 49 TFEU, specifically whether it is compatible with that freedom for the tax authorities of a Member State to refuse to a company belonging to a cross-border group the right to deduct from its taxable profits the interest it pays on such a loan debt.  The anti-avoidance rule in question is contained in Article 10a of the Wet op de vennootschapsbelasting 1969. The rule is specifically designed to tackle tax avoidance practices related to intra-group acquisition loans. Under that legislation, the contracting of a loan debt by a taxable person with a related entity – for the purposes of acquiring or extending an interest in another entity – is, in certain circumstances, presumed to be an artificial arrangement, designed to erode the Netherlands tax base. Consequently, that person is ... Read more

The Swedish Supreme Administrative Court (Högsta förvaltningsdomstolen) submitted a request for a preliminary ruling to the European Court of Justice on the compatibility of an interest limitation rule in the Swedish Law on income tax with the freedom of establishment provided for in Article 49 of the Treaty on the Functioning of the European Union. “5 Under Paragraph 10b of Chapter 24 of the Swedish Law on income tax, a company linked in a group of associated companies may not deduct interest expenses in relation to a debt owed to an associated company, unless otherwise provided for under Paragraph 10d or Paragraph 10e of that chapter. 6 The first subparagraph of Paragraph 10d of Chapter 24 of the Law on income tax provides that interest expenses relating to the debts referred to in Paragraph 10b of that chapter are deductible if the corresponding income would have been taxed at a nominal rate of at least 10% under the legislation of ... Read more