The European Commission has decided to open a formal investigation into a tax scheme allowing Hungarian companies to claim only 50 per cent of interest received from or paid to affiliates in the context of intra-group financing. According to these tax rules, only half of the interest received will be taxed. In turn, an affiliate can only deduct half of the interest from its taxable income. However, interest-paying affiliates located outside Hungary are not subject to these rules and can therefore deduct the full amount of the interest paid. The Commission doubts that the scheme forms a general tax measure, as it applies only to group companies and excludes small and individual companies.