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Itelcar – Automóveis de Aluguer Lda v Fazenda Pública

The Portuguese ‘thin capitalisation’ legislation provided that where a Portuguese company paid interest on part of an overall debt which was categorised as excessive it was not deductible if it was paid to a lender established in a non-EU state but was deductible if it was paid to an associated company which was resident in the EU subject to certain provisos. In Itelcar – Automóveis de Aluguer Lda v Fazenda Pública (CJEU Case C-282/12) a Portuguese company which had claimed a deduction for interest paid to an associated US company appealed against the disallowance of part of that interest contending that the relevant Portuguese legislation breached what is now article 63 of the TFEU. The CJEU held that the Portuguese legislation did not meet ‘the requirements of legal certainty’ and therefore could not ‘be considered to be proportionate to the objectives pursued’....

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