The Interest Limitation Rule in the Anti-Tax Avoidance Directive (ATAD) and the Net Taxation Principle - EC Tax Review View The Interest Limitation Rule in the Anti-Tax Avoidance Directive (ATAD) and the Net Taxation Principle by - EC Tax Review The Interest Limitation Rule in the Anti-Tax Avoidance Directive (ATAD) and the Net Taxation Principle 26 3

This article discusses the rationale for limiting the income tax deduction of interest payments, taking into account the net taxation principle, as well as the compatibility of Article 4 of the Anti-Tax Avoidance Directive (ATAD) with the Treaty on the Functioning of the European Union (TFEU).

It also discusses the compatibility of a national provision that is similar to Article 4 of the ATAD, with a national constitution. Assuming that such national interest limitation rule is declared unconstitutional, but, in turn, Article 4 of the ATAD is not declared incompatible with the TFEU, a conflict with EU Law will arise. This is so, because European Union (EU) Law is to be given full effect by EU Member States.

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