Must the losses of a merging company be deductible in the state of residence of the receiving company in EU?

Resource Information

The work Must the losses of a merging company be deductible in the state of residence of the receiving company in EU? represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

Must the losses of a merging company be deductible in the state of residence of the receiving company in EU?

Creator

• Helminen, M

Subject

• ECJ case law
• Merger Directive
• cross-border loss relief
• cross-border merger
• fundamental freedoms

Language

eng

Summary

The EU Merger Directive is silent on the question of the extent in which the state of residence of the receiving company must allow a deduction of the losses of the merging company in an intra-EU cross-border merger. The extent to which the losses are deductible depends on the domestic tax laws and the freedom of establishment principle of the Treaty of the Functioning of the European Union (TFEU). The Supreme Administrative Court of Finland considers it to be unclear whether the freedom of establishment principle of the TFEU requires Finland to allow a Finnish receiving company to deduct the losses of a Swedish merging company after a merger in which there will be no permanent establishment left in Sweden. As a consequence, the Court decided to refer a case concerning this issue to the ECJ. The Court considers that it is also unclear as to whether the deductible amount of the Swedish loss should be determined in accordance with the Swedish laws or the Finnish laws, if the ECJ considers that it has to be deductible. In this article, the author discusses the case referred to the ECJ from the perspective of the freedom of establishment principle and concludes that in the case concerned, a deduction should be allowed

Citation source

In: EC tax review. - Alphen aan den Rijn. - Vol. 20 (2011),

Geographic coverage

• European Union
• Europe

Language note

English