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Thin Capitalisation

Chris Morgan Head and Jonathan Bridges Senior Manager KPMG's International Corporate Tax Group comment on the ECJ's decision in the Thin Cap GLO test case
On 13 March 2007 the ECJ delivered its decision in the Thin Cap GLO test case. The case concerned the UK thin capitalisation rules in place up to April 2004. In other words the case considered the legality of legislation in force prior to April 2004 changes which saw the abolition of the thin capitalisation rules themselves and the extension of the UK transfer pricing legislation to explicitly cover debt financing and also UK-UK intra-group transactions. In this article we shall comment on the key points coming out of the decision.
Questions Referred For An ECJ...

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