EU: CJEU Advocate General opinion that Luxembourg correctly transposed ATAD interest limitation rules
Exception from interest limitation rules for securitization special purpose vehicles (SPVs) permissible
The CJEU on June 18, 2026, published the opinion of its AG in case C‑241/25 that the CJEU dismiss the European Commission’s (EC’s) infringement action against Luxembourg concerning its implementation of the Anti-Tax Avoidance Directive (ATAD) interest limitation rules.
Summary
Article 4(7) of the ATAD allows member states to exclude certain "financial undertakings" from the interest deduction limitation rules, referencing a closed list in Article 2(5). While securitization companies regulated under the EU Securitization Regulation are not explicitly on that list, Luxembourgish legislation contains an exception for securitization special purpose vehicles (SPVs). In July 2023, the EC referred Luxembourg to the CJEU for allegedly failing to correctly transpose the ATAD.
The AG acknowledged that while Article 2(5) appears exhaustive, it must be interpreted in conformity with primary EU law, specifically the principle of equal treatment under Article 20 of the Charter of Fundamental Rights of the European Union. The AG found that securitization SPVs possess "specific characteristics" comparable to listed financial undertakings, primarily dealing with borrowed capital and interest. Furthermore, because these vehicles are subject to specific EU regulation (Regulation (EU) 2017/2402), they are no more prone to abusive tax arrangements than the entities explicitly listed in the ATAD exception. Thus, subjecting securitization SPVs to the interest limitation rule while exempting other regulated financial undertakings amounts to unequal treatment.
Read a July 2026 report prepared by KPMG’s EU Tax Centre