For those who missed it, the court ruled that companies could claim group
relief for losses incurred in EU subsidiaries, unless – and this is the crucial
point – they ‘could have claimed’ relief in the countries themselves.
Such a requirement is absurdly difficult. Some EU countries allow offsets 10
years after the losses are made. Are companies supposed to wait that long?
If you sold the company too, as M&S did, the losses could be used by a
third party and if the third party uses those losses you may not be able to
offset the losses. Compare that with UK group relief, which allows companies to
offset losses now or in the future and the ECJ verdict looks unnecessarily
The ECJ was heavily lobbied by member states, and those who defend the
verdict say that states would have raised taxes if they had lost. Well, so what?
Those who defend it also argue that companies should not be able to just shop
around for reliefs. Why not?
That is just the single market, and if you pay lip service to it, you have to
live with it. The competition should benefit European business, and tax revenues
as a result.
The single market is perhaps the most worthy notion the EU has to offer. In
an attempt to appease the short-term concerns of finance ministers, the ECJ
seems to have ditched even that.
Alex Hawkes edits the tax page
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states