An Ever distant Union: the Cross-Border Loss Relief Conundrum in EU Law

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Show simple item record Ruiz Almendral, Violeta 2011-04-13T11:13:41Z 2011-04-13T11:13:41Z 2010
dc.identifier.bibliographicCitation Intertax, 2010, vol. 38, issue 10, p. 476-501
dc.identifier.issn 0165-2826
dc.description Web del editor:
dc.description.abstract Cross-border loss relief may well be the last milestone, barring total tax consolidation, in the European Union (EU) market integration from a tax law perspective. As the Commission’s Communication on the Tax Treatment of Losses in Cross-Border Situations demonstrates, there is yet a lot of ground to be covered in harmonizing this aspect of corporate income taxes (CITs). While the Common Consolidated Corporate Tax Base (CCCTB) proposal seems to be stalled, a series of relatively recent European Court of Justice (ECJ) cases (among others, X Holding BV) may be tilting the balance in the interest of Member States, for the first time allowing the safeguard of revenues, or the ‘balanced allocation of taxing powers’ to be the deciding argument in allowing restrictions on the offsetting of losses. Losses cannot be analysed in isolation of the rules to determine the taxable base, as they are one more piece in the tax base puzzle. In this article, I focus on two issues: multinational groups and permanent establishments (PEs), as they comprise the main problems arising in cross-border loss relief. The different methods employed to grant loss relief are assessed, as well as the new Organisation for Economic Co-operation and Development (OECD) proposals on the taxation of PEs. My main argument is that restrictions of loss relief have an effect that go beyond discriminating or restricting – that is, beyond making it ‘less attractive’ to move around the EU. Such restrictions touch the core of taxation of income. If no loss relief is provided, the tax is not reflecting the real ability to pay, thus not only is it not being neutral and inefficient, it is also creating a fictional tax debt.
dc.description.sponsorship It has been completed in the framework of a Publicly Funded Research Project on Direct Tax Harmonization in the European Union (titled La fiscalidad directa en la Unión Europea: entre competencia y convergencia), financed by the Spanish Ministry of Science and Innovation (Ref. DER 2010-20000, Dir. Juan Zornoza). This work has also benefited from a Senior Professors Research Grant from the Spanish Ministry of Education (Beca de Movilidad de Profesores, Programa Senior, Ministerio de Educación), as well as from a post-maternity research help.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.publisher Kluwer Law International
dc.rights © Kluwer Law International
dc.subject.other Derecho tributario
dc.subject.other European Union
dc.subject.other Taxes
dc.subject.other Unión Europea
dc.subject.other Impuestos
dc.subject.other Derecho tributario comunitario
dc.title An Ever distant Union: the Cross-Border Loss Relief Conundrum in EU Law
dc.type article
dc.description.status Publicado
dc.subject.eciencia Derecho
dc.rights.accessRights openAccess
dc.type.version publishedVersion
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