Limits of Interest Deduction Restrictions Deriving from the Prohibition of Abuse of EU Law: Lessons from X BV (C-585/22) for the Netherlands and Other Member States – Part 2

In this article, the authors comment on the recent ECJ decision in X BV (C-585/22) from both an EU and domestic law perspective. Part 1, published in the January 2025 issue of European Taxation, provided an analysis of the decision and its impact on the interpretation of the Dutch legal framework on interest deduction restrictions. Part 2 explores the EU principle of prohibition of abuse of law in the context of the EU jurisprudence on interest deduction restrictions, highlighting the developments introduced by X BV. Further, the authors analyse the impact of the decision on other EU Member States that use the arm’s length principle as a standard for abuse.