Corporation tax: ECJ ruling in thin capitalisation case | Practical Law
In Test claimants in the thin capitalisation group litigation v Commissioners of Inland Revenue, the European Court of Justice (ECJ) has held that thin capitalisation rules such as those that applied in the UK before 1 April 2004 are a restriction on the freedom of establishment but that such a restriction is permissible in the context of wholly artificial arrangements entered into for tax reasons alone, provided certain criteria are met.