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Tax & Legal

Tax & Legal

ECJ – Opinion of Advocate General: losses of non-resident permanent establishment


On 17 January 2018 the Advocate General Campos Sánchez-Bordona published an opinion on a referral to the European Court of Justice (ECJ) by the Eastern Regional Court in Denmark. The case relates to the entitlement of a Danish company to set off the final losses of its Finnish permanent establishment (PE) and the compatibility with EU law of Denmark’s “international joint taxation” scheme. Continue reading

Exemption of loss forfeiture for troubled businesses illicit state aid?


The exception of the German loss restriction rules for acquisitions in the course of a rescue operation to save a troubled business was held by the European General Court as a selective measure as it favours certain companies – those in financial difficulties – over their competitors in the marketplace. Two cases were brought to the ECJ for final clarification. The advocate general in one of the cases now proposes that the ECJ overturn the judgment of the General Court to the extent that it dismissed the action as unfounded. Continue reading

Immediate taxation on transfer of a foreign branch is not proportional


In a decision published on 23 November 2017 the European Court of Justice (“ECJ”) again considered the question on the taxation of the transfer of assets of a foreign branch in exchange for new shares. The question was referred to it by the Administrative Court of Helsinki in Finland. The ECJ held that the taxpayer must be given the choice between an immediate charge to tax and a deferred payment of tax. Continue reading

German exclusion from withholding tax relief in conflict with EU law? UPDATE


The German anti- treaty shopping rule denying full or partial relief from withholding tax, as otherwise prescribed under a double tax treaty or applicable EU directive, is questioned by the Lower Tax Court of Cologne as being in violation of community law. The question has been referred to the ECJ in number of cases. Continue reading

VAT – Supply of goods – Finance lease with option to purchase


On 4 October 2017 the European Court of Justice decided that a finance lease with an option to purchase should be qualified as a “supply of goods” where the exercise the option appears to be the only economically rational choice that the lessee could make at the appropriate time. As a result the whole of the VAT becomes due when the object to be leased is handed over. Continue reading

Bundesrat reacts positively to exchange of information for tax-saving schemes


At its sitting on 22 September 2017 the Bundesrat (Federal Council/upper house) expressly welcomed the proposal for an amendment of Council Directive 2011/16/EU on administrative cooperation in the field of taxation to impose a reporting obligation on cross-border schemes. It has long been a demand of the Bundesrat that rules on reporting obligations be introduced. Continue reading

Disallowance of discount on delivery of pharmaceuticals in breach of EU VAT law?


An ECJ advocate general has suggested that the court should rule that price rebates granted by manufacturing pharmaceutical companies on deliveries of pharmaceutical products to public health insurances and private health insurances must be treated equally for VAT purposes insofar as they both reduce the taxable basis for VAT. Continue reading