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Interest Rate Swap Taxation in France and Italy

Author

Listed:
  • Georges Cavalier

    (EDPL - Centre d'études et de recherches financières et fiscales - EDPL - Equipe de droit public de Lyon - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon, ERLJ - Équipe de recherche Louis Josserand - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon)

  • Marco Greggi

    (UniFE - Università degli Studi di Ferrara = University of Ferrara)

Abstract

Are the costs incurred by an operative (non-financial) company upon termination of an interest swap agreement deductible from its corporate income tax basis? The Italian Supreme Court answers negatively, because the contract does not have a hedging purpose and the company. Is producing goods in the field of metals and steel: no correlation is discernible between the loss deriving from the contract and the positive components deriving from the core business activity. The French view might be opposite. This asymmetry in the deduction of the cost from the (likely) taxation of the profits on the other company engaged in the transaction might jeopardize EU fundamental rights, including the free movement of capital (art. 63 TFEU). Tax asymmetries are always dangerous and distortive. Whatever the statutory regulation shall be, it needs to be taken in an EU harmonized framework.

Suggested Citation

  • Georges Cavalier & Marco Greggi, 2020. "Interest Rate Swap Taxation in France and Italy," Post-Print hal-04690489, HAL.
    • Handle: RePEc:hal:journl:hal-04690489
    Note: View the original document on HAL open archive server: https://univ-lyon3.hal.science/hal-04690489v1
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    File URL: https://univ-lyon3.hal.science/hal-04690489v1/document
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