The Advocate General of the Court of Justice of the European Union (CJEU) on 17 March 2016 rendered her opinion in a case concerning whether the Portuguese withholding tax on interest paid to non-resident financial institutions is contrary to EU law because it is imposed on the gross amount of the interest paid, whereas resident financial institutions are taxed on their net income.
The Advocate General concluded that the Portuguese treatment constitutes a restriction of the freedom to provide services, and that financing costs could, in principle, be deducted even when these could not be traced to specific loans.
Read a March 2016 report [PDF 278 KB] prepared by KPMG’s EU Tax Centre
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