EU Commissioner Kovács welcomes Court of Justice ruling on cross-border loss relief
EU Commissioner for taxation and customs László Kovács on 13 December welcomed the European Court of Justice ruling delivered on the same day in the Marks & Spencer case on cross-border loss relief.
"Today the Court took a position that is supported by the Commission regarding the application of the principle of freedom of establishment for cross-border loss relief. The Court ruled essentially that Member States granting relief to companies for losses of subsidiaries must allow such relief also in the case of non-resident subsidiaries, if the losses cannot be taken into account in the Member State of residence of those subsidiaries. To deny the relief in such cases is, in the Court's view, contrary to the principle of freedom of establishment under the EC Treaty.
It is clear that Member States and the Commission will have to work together so as to draw conclusions from this judgement with a view to ensuring clarity for businesses operating within the Internal Market and ensuring that Treaty obligations are respected.
It is also clear that we cannot at this stage make any calculations on budgetary consequences for the Member States concerned. "
The European Commission is planning to present a Communication on cross border loss relief to the European Parliament and EU Council next year that will take account of the Court's ruling. For further information see the press release issued by the Court.
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