The incompatability of art. 4 ATAD with freedom of establishment: Evidence from the Swedish implementation

Sammanfattning: The Anti-Tax Avoidance Directive calls for a new chapter in the fight against tax avoidance and abuse in the European Union - as a minimum level of protection against tax avoidance practises is established. Member States have a certain degree of discretion when implementing the directive. They must however make sure that measures transposed are in line with primary EU law. This essay investigates whether the Swedish transposition of the interest limitation rules in art. 4 is compatible with the freedom of establishment of art. 49 in the Treaty on the Functioning of the European Union. To answer this, case law from the Court of Justice, opinions from advocate general and academic articles are examined. The findings suggest that two of the transposed Swedish measures are not compatible with the freedom of establishment. However, when compared to art. 4 of the directive, it seems like the transposition is very much in line with the options provided for. That the Swedish rules would be considered incompatible if assessed by the Court of Justice does therefore seem rather unlikely. Approval of this kind of provisions would, in the authors opinion, indicate a development in what characteristics a restricting measure may take for anti-avoidance purposes.