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KHO:1999:18 AI generated

Supreme Administrative Court allows deduction of business income interest expenses despite negative company capital from prior owner.

Case Number KHO:1999:18
Court / Authority
Jurisdiction Finland (FI)
Decision Date
Outcome Allowed / Granted
Open official source Machine-readable Markdown (.md)

Legislator summary

AI generated

The Supreme Administrative Court allowed the taxpayer to deduct interest expenses on business income despite the company's negative capital resulting from the previous owner's private debts. The taxpayer argued that the restriction on deduction based on negative capital should not apply after the ownership change, as the debt originated before the transfer. The court ruled that the statutory limitation on deduction applies regardless of when the negative capital was incurred, provided the expenses are genuinely related to business operations.

Legislator headnote

AI generated

Laki elinkeinotulon verottamisesta 7 §; 18 § 2 mom.: The deduction of interest expenses on business income is not restricted by negative company capital even if that capital arose from the previous owner's private debts prior to the ownership transfer.

Keywords

AI generated
business income tax interest expense deduction negative company capital ownership transfer tax limitation rules private debt liability Supreme Administrative Court

Cited Legislation

AI generated
Laki elinkeinotulon verottamisesta 7 §
Laki elinkeinotulon verottamisesta 7 § ja 18 § 2 mom
Laki elinkeinotulon verottamisesta 18 § 2 mom.
AI generated
kho-precedent_1998_44
Limitation of interest expense deduction denied when company's own capital remains positive on balance sheet.
kho-precedent_2000_5
Supreme Administrative Court dismissed tax deduction claim for capital contributions made during debt restructuring proceedings.
admin_1993_kuopio-county__499
Finnish tax court rules that a partner's share ownership duration resets only upon change of status, not mere status change.
admin_1986_mikkeli-county__831
Administrative court allows mortgage interest deduction post-divorce when property division is pending.
admin_2000_helsinki__910
Shareholder liability for VAT imposed on unregistered company actions by non-owner director.

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Full text

A oli vuonna 1989 ostanut kommandiittiyhtiön vastuunalaisen yhtiömiehen yhtiöosuuden. Kommandiittiyhtiön oma pääoma oli tuolloin negatiivinen edellisen vastuunalaisen yhtiömiehen yksityisottojen johdosta. Kommandiittiyhtiön elinkeinotoiminnan korkomenojen vähennyskelpoisuus oli omistajanvaihdoksen jälkeenkin elinkeinotulon verottamisesta annetun lain 18 §:n 2 momentissa tarkoitetulla tavalla rajoitettu siitä riippumatta, että oma pääoma oli muodostunut negatiiviseksi jo edellisen vastuunalaisen yhtiömiehen aikana. Verovuodet 1993, 1994 ja 1995.

Laki elinkeinotulon verottamisesta 7 § ja 18 § 2 mom