Action brought on 20 February 2024 – European Commission v Grand Duchy of Luxembourg

(Case C-138/24)

Language of the case: French

Parties

Applicant: European Commission (represented by: W. Roels, A. Ferrand, acting as Agents)

Defendant: Grand Duchy of Luxembourg

Form of order sought

The applicant claims that the Court should:

declare that the Grand Duchy of Luxembourg has failed to fulfil its obligations under Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (OJ 2016 L 193, p. 1), by adding securitisation special purpose entities to the list of types of financial undertakings set out in Article 2(5) of that directive with a view to allowing their exclusion from the scope of the interest limitation rules of Article 4 of that directive;

order the Grand Duchy of Luxembourg to pay the costs.

Plea in law and main arguments

The Commission submits that the Grand Duchy of Luxembourg added securitisation special purpose entities to the types of financial undertakings listed in Article 2(5) of Directive 2016/1164 with a view to allowing their exclusion from the scope of the interest limitation rules of Article 4 of that directive.

Article 4(7) of Directive 2016/1164 admittedly provides for the option for Member States to exclude financial undertakings from the limitation on the deductibility of exceeding borrowing costs for the purposes of the calculation of the basis of assessment for corporation tax. However, Article 2(5) of that directive contains an exhaustive list of entities that fall within the concept of financial undertakings. Securitisation special purpose entities are not included in that list and therefore do not fall within the concept of financial undertakings within the meaning of that directive.

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