Tax & Legal

In its judgment in Morgan Stanley (C-165/17) on 24 January 2019, the ECJ ruled on the ratio of deductible input tax in relation to the internal supplies of a French branch to its head office, a financial service provider in the UK.

On December 22, 2016 the finance ministry has finally published its detailed administrative principles on the allocation of profits between a business and its foreign branches.

The Supreme Tax Court has held that the profit from the release of a provision no longer required arising from a foreign permanent establishment long after closure falls under the business profits clause of the relevant double tax treaty and is thus taxable in the foreign country.

The Supreme Tax Court has held that a taxpayer cannot deduct costs incurred in preparing for a foreign permanent establishment even if, in the event, the establishment never came into existence.

The Supreme Tax Court has held that the corporation tax rate on the permanent establishment income of non-EU foreign companies under the old, pre-2001 system was acceptable under community law and the double tax treaty.