Comment on Galeria Parque Nascente (Case C-438/18) Regarding the Deductibility of Interest in the Context of a Neutral Merger

This article examines the position taken by the ECJ in a case on the compatibility of the Merger Directive (2009/133) with a Portuguese provision preventing taxpayers from deducting interest on loans taken out to finance the acquisition of shares, upon the merger of the borrower with the target. In the authors’ view, the ECJ’s decision is contrary to previous case law and opens the door to a relevant restriction on operations covered by the Directive.