Not allowing overseas losses to be offset against UK profits was contrary to the freedom of establishment rights detailed in the EC treaty.
A Member State may treat overseas entities differently from resident entities; it mayimpose restrictions so that the losses can't be used in both states; and it can limit free transfer of losses so prevent groups relieving profits in states with the highest tax rates.
So the decision means that there must be no possibility of using the losses in the overseas state, if they're to be set against profits in the UK.
Regarding the black hole, that's Gordon Brown's excessive spending at work. The M&S decision will work both ways; UK losses can be used by overseas companies if the conditions are met. Alignng the tax systems of EU mamber states will vastly simplify business, since lots of the complicated group structures won't be relevant any more.
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Date: 2005-12-16 03:56 pm (UTC)A Member State may treat overseas entities differently from resident entities; it mayimpose restrictions so that the losses can't be used in both states; and it can limit free transfer of losses so prevent groups relieving profits in states with the highest tax rates.
So the decision means that there must be no possibility of using the losses in the overseas state, if they're to be set against profits in the UK.
Regarding the black hole, that's Gordon Brown's excessive spending at work. The M&S decision will work both ways; UK losses can be used by overseas companies if the conditions are met. Alignng the tax systems of EU mamber states will vastly simplify business, since lots of the complicated group structures won't be relevant any more.