In June 2011 the government published their view of EU law which suggested that Cadbury-Schweppes was not the last word from the CJEU on the topic and that the subsequent transfer pricing cases of Thin Cap GLO and SGI had evolved a principle capable of more general application. As such, the proposed new CFC rules do not appear to be limited to ‘wholly artificial arrangements’ as Cadbury-Schweppes and Vodafone 2 suggest they need to be, particularly in the way they deal with finance income and, as such, they may be susceptible to challenge under EU law.
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