This case concerned what the ECJ (and the Belgian revenue and courts) appeared to regard as an uncommercial tax scheme. A Belgian company granted interest free loans to its 62% French subsidiary in circumstances where the subsidiary did not need the cash and the loans put severe financial pressure on the lender. The Belgian lender then paid excessive directors’ remuneration to its 34% parent. This fell foul of Belgian transfer pricing provisions as amounting to abnormal, unusual or gratuitous advantages granted to non resident affiliated companies. No such adjustment would arise domestically.

The case is perhaps worth noting for its conclusion that a interest sufficient to amount to direct influence (so that old article 43 applies) can descend to at least 34%. Otherwise the case is a repetition of the case law judgment concluding that the Belgian provisions are permissible provided they protect genuine commercial arrangements.