The proposed measure is based on the assumption that the costs of the hedging instrument are fully deductible, while the projected profit will fall under the participation exemption.
This judgment constitutes confirmation of previous case law in which the interest deduction on shareholder loans for acquisitions was also not accepted.
The A-G has concluded, on various grounds, that the rate for interest on tax due of 8% cannot be maintained and should be reduced. It is now up to the Supreme Court to decide on this matter.
