European Tax Law Center - Newsflash #3

The CJEU ruled that the freedom of establishment does not prevent a Member State from excluding the claim of tax losses within its jurisdiction, where those losses were incurred in another Member State before the transfer of a company’s place of effective management and that company retains its registered office in that other Member State.

On February 27, 2020, the Court of Justice of the European Union (CJEU) issued its decision in the case of AURES Holdings a.s. v Odvolací finanční ředitelství (C-405/18). The case concerned a Dutch company, AURES Holdings, which incurred a substantial loss in 2007. In 2008, AURES Holdings established a branch in the Czech Republic which qualified as a permanent establishment of the company under Czech law. Subsequently, in 2009, Aures Holdings moved its place of effective management, and consequently its tax residence, to the Czech Republic. Nevertheless, AURES Holdings retained its registered office in the Netherlands.

The full ETLC document can be viewed here.