Is the Deduction of Interest on Acquisition Loans Possible? New Developments in LBO Acquisition Structuring in the Netherlands and Switzerland

Abstract

The publication intends, based on a hypothetical case, to answer the question what the position of the national legislation and tax authorities is with regard to the deductibility of interest payments in an LBO acquisition. Therefore, possible scenarios about the structuring process in two different countries and its treatment by the tax authorities will be made visible and compared with the position of academics. By considering the legislative changes of 2012 in the Netherlands with regard to the deductibility of interest on acquisition loans and the cantonal differences in Switzerland recent developments will be shown and an outlook will be presented. This comparative analysis fosters in addition the understanding of and the meaning by the authorities of national anti-avoidance rules and the term "tax avoidance".