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EU Court Backs Belgian Law on Tax Equity Financing Deductions

Oct. 17, 2019, 5:37 PM

The EU high court ruled that a revised Belgian law limiting tax equity financing deductions for foreign-based subsidiaries of multinational companies doesn’t violate European law.

The law was challenged by Belgian Argenta Spaarbank N.V., which said that Belgian tax authorities violated European Union single market rules by limiting equity finance tax deductions from its Dutch-based subsidiary. The European Court of Justice rejected the bank’s appeal Oct. 17 (C-459/18).

Key to the ECJ ruling was a double taxation treaty between Belgium and the Netherlands. While the court recognized that the Belgian equity financing tax deductions differ for subsidiaries inside...

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