UK Finco exemption: In UK and ITV plc v European Commission (Joined Cases T-363/19 and T-456/19) (11 April 2024) Advocate General Medina has opined that the CJEU should set aside the General Court’s judgment and annul the Commission’s decision regarding tax breaks granted by the UK to certain multinational groups between 2013 and 2018.
According to the Commission the UK’s Controlled Foreign Company (CFC) rules were aimed at preventing the UK companies from using a subsidiary based on a low or no tax jurisdiction to avoid taxation in the UK. They allowed the UK authorities to reallocate all profits artificially diverted to an offshore subsidiary back to the UK parent company where it could be taxed accordingly. However between 2013 and 2018 the CFC rules included an exemption for certain financing income (i.e. interest payments received from loans) of multinational groups active in the...
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