TaxSource Total

Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

The report of key tax developments are displayed per year, per month, by Ireland, the UK or International and by report title

Denmark’s Cross-border Loss Relief Rules Examined by the Court of Justice of the European Union

Case C-48/13, Nordea Bank Danmark A/S v Skatteministeriet, required the CJEU to examine the cross-border taxation of a group of companies by a Member State and the compatibility of that taxation with freedom of establishment.

This case concerned the taxation of a Danish company, Nordea Bank, together with its permanent establishments located in Finland, Sweden and Norway. Under Danish tax law, the profits or losses of foreign permanent establishments are taken into account when determining the tax liability of the parent company. Therefore, the losses made by Nordea Bank’s foreign permanent establishments were factored into the calculation of Nordea Bank’s Danish tax liability. However, Nordea Bank’s foreign permanent establishments were sold within the group to companies in respect of which Denmark had no right of taxation and this triggered a clawback of the loss relief originally granted to Nordea Bank in respect of the foreign establishments.

The CJEU held that the Danish tax rules in this case constituted a restriction on the freedom of establishment on the grounds that Danish companies with foreign permanent establishments are treated less favourably than Danish companies with domestic establishments as a clawback of loss relief does not apply in the case of a transfer of a domestic establishment.

For full details of the case and judgement, see Curia’s website.