Case C-282/12: Judgment of the Court (Fourth Chamber) of 3 October 2013 (request for a preliminary ruling from the Tribunal Central Administrativo Sul — Portugal) — ITELCAR — Automóveis de Aluguer Lda v Fazenda Pública (Free movement of capital — Tax legislation — Corporation tax — Interest paid by a resident company on funds lent by a company established in a non-member country — Existence of ‘special relations’ between those companies — Thin capitalisation rules — No right of deduction in relation to interest on the part of the overall debt regarded as excessive — Interest deductible if paid to a company resident in the national territory — Tax evasion and avoidance — Wholly artificial arrangements — Arm’s length terms — Proportionality)
Date: 2013-10-03
Institutions: Court of Justice
Subjects: corporation tax, free movement of capital, loan, principle of proportionality, tax avoidance, tax evasion, tax law, tax relief








C_2013344EN.01003001.xml










23.11.2013   


EN


Official Journal of the European Union


C 344/30





Judgment of the Court (Fourth Chamber) of 3 October 2013 (request for a preliminary ruling from the Tribunal Central Administrativo Sul — Portugal) — ITELCAR — Automóveis de Aluguer Lda v Fazenda Pública
(Case C-282/12) (1)

(Free movement of capital - Tax legislation - Corporation tax - Interest paid by a resident company on funds lent by a company established in a non-member country - Existence of ‘special relations’ between those companies - Thin capitalisation rules - No right of deduction in relation to interest on the part of the overall debt regarded as excessive - Interest deductible if paid to a company resident in the national territory - Tax evasion and avoidance - Wholly artificial arrangements - Arm’s length terms - Proportionality)
2013/C 344/51
Language of the case: Portuguese

Referring court

Tribunal Central Administrativo Sul

Parties to the main proceedings


Appellant: ITELCAR — Automóveis de Aluguer Lda

Respondent: Fazenda Pública

Re:

Request for a preliminary ruling — Tribunal Central Administrativo Sul (Portugal) — Interpretation of Article 63 TFEU and Article 65 TFEU — Tax legislation — Corporation tax — Interest deductible on borrowing — National rules providing for deduction in the case of excessive indebtedness to a company established in the national territory but not in the case of excessive indebtedness to a company established in a non-member country

Operative part of the judgment

Article 56 EC must be interpreted as meaning that, in the case of rules of a Member State which provide that, where interest applied to the part of an overall debt categorised as excessive has been paid by a resident company to a lending company established in a non-member country with which the borrowing company has special relations, it is not deductible as an expense for the purposes of determining taxable profit, but where such interest is paid to a resident lending company with which the borrowing company has special relations, it is deductible for those purposes, those rules are precluded where, if the lending company established in a non-member country does not have a shareholding in the resident borrowing company, they nevertheless presume that the overall debt owed by the borrowing company forms part of an arrangement designed to avoid the tax normally payable or where they do not make it possible, at the outset, to determine their scope with sufficient precision.


(1)  OJ C 250, 18.8.2012.