The Commission has formally requested the UK to amend its legislation providing for exit taxes on companies. The UK legislation in question imposes a tax on unrealised capital gains of certain assets when the place of effective management of a company is transferred to another EU/EEA State. A similar transfer within the UK would not generate any such immediate taxation and the relevant capital gains would only be taxed once they have been realised.

According to the Commission, the UK has failed to fulfil its obligations under EU law as such an exit tax breaches the freedom of establishment. The Commission's request takes the form of a reasoned opinion (second step of EU infringement proceedings). In the absence of a satisfactory response within two months, the Commission may refer the United Kingdom to the Court of Justice of the European Union.

The Commission has already taken action against a number of EU Member State over the issue of exit taxes including infringement proceeding against Ireland and an ECJ case against the Netherlands.