A Oy [2012] EUECJ C-123/11 (19 July 2012)

A Oy [2012] EUECJ C-123/11 (19 July 2012)

Neither the Tax Merger Directive nor Articles 49 and 54 TFEU preclude a national measure which provides that a receiving company resident in a Member State may not deduct for tax purposes the losses arising from the business activity in another Member State of a company which was resident in that other Member State and which has merged with it where that activity was subject exclusively to that other Member State’s right of taxation.

Citation
[2012] EUECJ C-123/11
Parties
Applicant: A Oy; Referring Court: Korkein hallinto-oikeus (Finland); Subsidiary: B AB
Jurisdiction
European Union
Judgment Date
19 July 2012
Procedural Posture
Preliminary Ruling / Opinion of Advocate General
Outcome
National law upheld; cross-border loss deduction not required by EU law.
Legal Topics
Freedom of Establishment, Cross Border Mergers, Deductibility of Losses, Directive 2009/133/ec, National Income Tax Law
Tax Law European Union Law Corporate Law Freedom of Establishment Cross Border Mergers Deductibility of Losses Directive 2009/133/ec National Income Tax Law

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Parties

A Oy

Applicant

Korkein hallinto-oikeus (Finland)

Referring Court

B AB

Subsidiary

Procedural Posture

Preliminary Ruling / Opinion of Advocate General

Legal Issues

  1. 1 Whether EU law requires a Member State to allow a receiving company to deduct losses of a merged company resident in another Member State
  2. 2 Whether losses should be calculated under the law of the receiving or transferring company

Ratio Decidendi

Neither the Tax Merger Directive nor Articles 49 and 54 TFEU preclude a national measure which provides that a receiving company resident in a Member State may not deduct for tax purposes the losses arising from the business activity in another Member State of a company which was resident in that other Member State and which has merged with it where that activity was subject exclusively to that other Member State’s right of taxation.

Court Disposition

National law upheld; cross-border loss deduction not required by EU law.