Deductibility of perpetual debt interest vs. hidden profit imputation under German corporate tax law

The Federal Constitutional Court declined to accept the constitutional complaint for review, thereby upholding the decision of the higher financial court and allowing the taxpayer’s loss. The dispute concerned the tax treatment of perpetual debt interest, specifically whether interest on a perpetual loan was deductible as a business expense or had to be added to taxable income under the "hinzurechnung" rule for hidden profits. The decisive legal basis involved the interpretation of the German Corporate Income Tax Act (§§ 8a KStG, 3 EStG) regarding the imputation of interest on shareholder loans with perpetual characteristics, where the lower courts found the interest constituted a disguised distribution of profits rather than a genuine debt service expense.