Skip to main content

Lund University Publications

LUND UNIVERSITY LIBRARIES

New Targeted Interest Deduction Limitation Rules Post Lexel

Tale, Alexander LU (2023) In Intertax 51(4). p.335-348
Abstract
Both the European Union (EU) Directive implementing the OECD’s Pillar Two and the proposal for a debt-equity bias reduction allowance (DEBRA) feature rules that target and limit interest deduction as the need for these still exists. However, in case C-484/19 Lexel from 2021, the Court of Justice of the European Union (CJEU) struck down the Swedish targeted interest deduction legislation of 2013 applying to loans between associated companies. The Court considered the legislation to constitute an unjustifiable restriction of the freedom of establishment. It essentially stated that only wholly artificial arrangements could be the object of the targeted interest deduction rules while, at the same time, concluding that transactions carried out... (More)
Both the European Union (EU) Directive implementing the OECD’s Pillar Two and the proposal for a debt-equity bias reduction allowance (DEBRA) feature rules that target and limit interest deduction as the need for these still exists. However, in case C-484/19 Lexel from 2021, the Court of Justice of the European Union (CJEU) struck down the Swedish targeted interest deduction legislation of 2013 applying to loans between associated companies. The Court considered the legislation to constitute an unjustifiable restriction of the freedom of establishment. It essentially stated that only wholly artificial arrangements could be the object of the targeted interest deduction rules while, at the same time, concluding that transactions carried out at arm’s length cannot be considered artificial or fictitious arrangements. After Lexel, the question is whether targeted interest deduction rules that are drafted with the objective of combating tax base erosion have any future, or must Member States only rely on the application of anti-abuse rules or targeted interest deduction rules mandated by secondary EU law? (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Tax law, EU-law, Taxation, Skatterätt, EU-rätt, Beskattning
in
Intertax
volume
51
issue
4
pages
335 - 348
publisher
Kluwer Law International
external identifiers
  • scopus:85151536141
ISSN
1875-8347
project
The right to implement independent corporate taxation: group taxation, interest deductions, BEFIT, the global minimum tax, and the legal status of OECD documents
language
English
LU publication?
yes
id
aedc3f58-75da-4564-b0c0-5fe649b6413c
alternative location
https://kluwerlawonline.com/journalarticle/Intertax/51.5/TAXI2023029
date added to LUP
2023-03-11 21:09:07
date last changed
2024-04-05 18:03:20
@article{aedc3f58-75da-4564-b0c0-5fe649b6413c,
  abstract     = {{Both the European Union (EU) Directive implementing the OECD’s Pillar Two and the proposal for a debt-equity bias reduction allowance (DEBRA) feature rules that target and limit interest deduction as the need for these still exists. However, in case C-484/19 Lexel from 2021, the Court of Justice of the European Union (CJEU) struck down the Swedish targeted interest deduction legislation of 2013 applying to loans between associated companies. The Court considered the legislation to constitute an unjustifiable restriction of the freedom of establishment. It essentially stated that only wholly artificial arrangements could be the object of the targeted interest deduction rules while, at the same time, concluding that transactions carried out at arm’s length cannot be considered artificial or fictitious arrangements. After Lexel, the question is whether targeted interest deduction rules that are drafted with the objective of combating tax base erosion have any future, or must Member States only rely on the application of anti-abuse rules or targeted interest deduction rules mandated by secondary EU law?}},
  author       = {{Tale, Alexander}},
  issn         = {{1875-8347}},
  keywords     = {{Tax law; EU-law; Taxation; Skatterätt; EU-rätt; Beskattning}},
  language     = {{eng}},
  number       = {{4}},
  pages        = {{335--348}},
  publisher    = {{Kluwer Law International}},
  series       = {{Intertax}},
  title        = {{New Targeted Interest Deduction Limitation Rules Post Lexel}},
  url          = {{https://kluwerlawonline.com/journalarticle/Intertax/51.5/TAXI2023029}},
  volume       = {{51}},
  year         = {{2023}},
}