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Scheuten Solar Technology GmbH v Finanzamt Gelsenkirchen-Süd

Under German legislation interest payments were not fully deductible when determining the taxable profits of the company making the payment.

In Scheuten Solar Technology GmbH v Finanzamt Gelsenkirchen-Süd (ECJ Case C-397/09) a German subsidiary of a Netherlands company lodged an appeal contending that this contravened Directive 2003/49/EC and the case was referred to the ECJ.

Advocate-General Sharpston rejected the company’s contentions expressing the Opinion that Article 1(1) of Directive 2003/49/EC was ‘limited to providing an exemption from a charge to tax upon interest payments made by associated companies situated in different Member States.

National provisions that determine the basis of assessment to tax such as rules governing the deductibility of expenditure fall outside the scope of Directive 2003/49.’ The Directive did not ‘preclude a provision under which loan interest paid by a company located in...

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