Masco Denmark ApS and another company v Skatteministeriet

European Union – Freedom of establishment. The Court of Justice of the European Union gave a preliminary ruling deciding that art 49 of the Treaty on the Functioning of the European Union, read in conjunction with art 54 of that treaty, had to be interpreted as precluding legislation of a member state, such as that at issue in the main proceedings, which allowed a resident company a tax exemption for interest paid by a resident subsidiary, in so far as that subsidiary was not entitled to a tax deduction for the corresponding interest expenditure by reason of the rules limiting the deduction of interest paid in cases of thin capitalisation, but which excluded the exemption that would result from the application of its own thin-capitalisation legislation in the case where the subsidiary was resident in another member state.

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