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The Resource AURES holdings a.s. (C-405/18) at the intersection of cross-border loss relief, corporate exit taxation and dual residency mismatches

18) at the intersection of cross-border loss relief, corporate exit taxation and dual residency mismatches represents a specific, individual, material embodiment of a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation.
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Summary: This article examines the European Court of Justice decision (ECJ) of 27 February 2020 in Case C-405/18 AURES Holdings a.s. on the application of the Marks & Spencer final losses doctrine to dual resident companies that transfer their treaty residence (place of effective management) to another Member State. The ECJ applied a two-step comparability analysis based on Timac Agro and Bevola to exclude current not-subject-to-tax emigration losses (not linked to the ability-to-pay of the immigrated company) from its preferred approach to always take final losses into account somewhere in the internal market. The immigration state was not forced to apply its taxing powers asymmetrically over emigration losses to prevent a conflict with the principle of fiscal territoriality in exit tax cases and international tax practice against base erosion and profit shifting (BEPS). If the immigration state still sovereignly decides to take these losses into account pursuant to a bilateral tax treaty, Article 9(b) of the Anti-Tax Avoidance Directive (ATAD) on dual residency mismatches prevents dual loss utilization

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Label: AURES holdings a.s. (C-405/18) at the intersection of cross-border loss relief, corporate exit taxation and dual residency mismatches

Title: AURES holdings a.s. (C-405/18) at the intersection of cross-border loss relief, corporate exit taxation and dual residency mismatches

Summary: This article examines the European Court of Justice decision (ECJ) of 27 February 2020 in Case C-405/18 AURES Holdings a.s. on the application of the Marks & Spencer final losses doctrine to dual resident companies that transfer their treaty residence (place of effective management) to another Member State. The ECJ applied a two-step comparability analysis based on Timac Agro and Bevola to exclude current not-subject-to-tax emigration losses (not linked to the ability-to-pay of the immigrated company) from its preferred approach to always take final losses into account somewhere in the internal market. The immigration state was not forced to apply its taxing powers asymmetrically over emigration losses to prevent a conflict with the principle of fiscal territoriality in exit tax cases and international tax practice against base erosion and profit shifting (BEPS). If the immigration state still sovereignly decides to take these losses into account pursuant to a bilateral tax treaty, Article 9(b) of the Anti-Tax Avoidance Directive (ATAD) on dual residency mismatches prevents dual loss utilization

Citation source: In: Intertax. - Alphen aan den Rijn. - Vol. 49 (2021), no. 2 ; p. 166-185

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Label: AURES holdings a.s. (C-405/18) at the intersection of cross-border loss relief, corporate exit taxation and dual residency mismatches

Label: AURES holdings a.s. (C-405/18) at the intersection of cross-border loss relief, corporate exit taxation and dual residency mismatches

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