Dr. Mathias Babel, KPMG Frankfurt
For editorial cut-off date, disclaimer, and notice of copyright see end of this article.
As an update, we note that a case posing the issue of the compatibility of Germany's thin capitalisation rules (§ 8a KStG) with European law is still pending before the European Court of Justice (ECJ case no. C-324/00).
Citing reasons why the thin capitalisation rules may violate the freedom of establishment clause of the EC Treaty, the Münster Tax Court referred the question of the compatibility of these rules with European law to the ECJ in its ruling of 21 August 2000 (9 K 11 93/00 – EFG 2000, 1273).
More recently, the Berlin Tax Court granted a taxpayer motion to stay collection of tax by reason of "serious doubt" as to the compatibility of § 8a KStG with European law (ruling of 26 January 2001 – 7 B 8348/00 – EFG 2001, 527).
Editorial cut-off date: 20 March 2002
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