The Commission has opened an in-depth investigation into the Hungarian intra-group interest taxation and has extended the formal investigation procedure regarding Belgian co-ordination centres.

Hungarian intra-group interest taxation

According to the Commission press release, the Hungarian scheme allows companies to claim as taxable income or expenses only 50% of the balance of interest received from or paid to affiliated companies in the context of intra-group relations. When a company based in Hungary has a positive balance of interest with its affiliated companies, only half of the interest is taxed. In turn, if the affiliated company paying the net interest is based in Hungary, it deducts only half of the amount from the taxable income. However, when the interest-paying affiliated company is located abroad, it is not subject to Hungarian tax rules. Therefore it is able to deduct the whole balance of interest paid from its taxable income.

The scheme is similar to the Dutch “Groepsrentebox” scheme.

Further information is available at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/375&format=HTML&aged=0&language=en&guiLanguage=en.

Belgian Co-ordination centres

The European Commission has decided to extend the procedure opened in 2002 under the EC Treaty's rules on State Aid in respect of the tax scheme for coordination centres.

Further information is available at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/370&format=HTML&aged=0&language=en&guiLanguage=en.