EU Securitisation Vehicles Likely To Continue To Be Exempt From Interest Limitation Rules

On 18 June 2026, Advocate General Juliane Kokott delivered her opinion in Case C‑138/24, European Commission v Grand Duchy of Luxembourg, concerning Luxembourg’s implementation of the EU Anti-Tax Avoidance Directive (“ATAD” or Directive). In the case at hand, she examined whether Luxembourg was entitled, when implementing ATAD, to treat securitisation entities within the meaning of Regulation (EU) 2017/2402 as “financial undertakings” exempt from the interest limitation rule.

Background to the case

As a reminder, the infringement proceedings stem from Luxembourg’s implementation of ATAD in 2018, when securitisation entities within the meaning of Regulation (EU) 2017/2402 were included among the “financial undertakings” and thereby excluded from the scope of the interest limitation rule. The European Commission argued that this approach went beyond ATAD, because EU securitisation entities are not expressly included in the exhaustive list of financial undertakings set out in Article