The Resource Interest limitation under the adopted Anti-Tax Avoidance Directive and proportionality

Interest limitation under the adopted Anti-Tax Avoidance Directive and proportionality

Label
Interest limitation under the adopted Anti-Tax Avoidance Directive and proportionality
Title
Interest limitation under the adopted Anti-Tax Avoidance Directive and proportionality
Creator
Subject
Language
eng
Summary
This article examines the compatibility of the interest limitation rule the European Union (EU) legislature included in its Anti-Tax Avoidance Directive adopted on 12 July 2016 with the proportionality principle. Under its settled case law concerning domestic interest limitation rules restricting a fundamental freedom for purposes of combating tax avoidance practices, the European Court of Justice (ECJ) holds that such measures do not comply with the principle of proportionality if they, amongst others, either do not provide the taxpayer with an opportunity to substantiate the commercial reasons for not entering into an arm's length loan arrangement, or restrict the deductibility of more interest than an arm's length interest. As the rule does neither adhere to the counterevidence rule nor to the arm's length principle, it is questionable whether its status as secondary EU law suffices for purposes of disregarding the aforementioned limitations set by the ECJ. Amongst others, the author takes the view that on the basis of ECJ case law, the interest limitation rule may be considered incompatible with the proportionality principle
Citation source
In: EC tax review. - Alphen aan den Rijn. - Vol. 25 (2016), no. 4 ; p. 184-198
http://library.link/vocab/creatorName
Os, P.B.N. van
Geographic coverage
  • European Union
  • Europe
Language note
English
http://library.link/vocab/subjectName
  • ATAD
  • interest deduction
  • ECJ case law
  • proportionality
Label
Interest limitation under the adopted Anti-Tax Avoidance Directive and proportionality
Instantiates
Publication
Label
Interest limitation under the adopted Anti-Tax Avoidance Directive and proportionality
Publication

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