# C_2007129EN.01000502.xml

| 9.6.2007 | EN | Official Journal of the European Union | C 129/5 |
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9.6.2007

EN

Official Journal of the European Union

C 129/5

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Reference for a preliminary ruling from the Bundesfinanzhof (Germany) lodged on 21 March 2007 — Finanzamt für Körperschaften III in Berlin v Krankenheim Ruhesitz am Wannsee-Seniorenheimstatt GmbH

(Case C-157/07)

(2007/C 129/08)

Language of the case: German

Referring court

Bundesfinanzhof

Parties to the main proceedings

Appellant: Finanzamt für Körperschaften III in Berlin

Appellant:

Respondent: Krankenheim Ruhesitz am Wannsee-Seniorenheimstatt GmbH

Respondent:

Questions referred

| 1. | Does Article 31 of the Agreement on the European Economic Area (1) prohibit a legal provision of a Member State according to which, when calculating total income, a taxpayer resident and subject to unlimited taxation in one Member State is able under certain conditions to deduct losses incurred by a permanent establishment situated in another Member State which are exempt from income tax pursuant to a double taxation convention,






  — | but according to which the sum deducted must, in the tax assessment period concerned, be added back in the calculation of total income, to the extent to which, in a subsequent tax assessment period, a positive amount of income from commercial activities which is exempt from tax pursuant to the double taxation convention is generated by permanent establishments in that other Member State, |
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1.

Does Article 31 of the Agreement on the European Economic Area (1) prohibit a legal provision of a Member State according to which, when calculating total income, a taxpayer resident and subject to unlimited taxation in one Member State is able under certain conditions to deduct losses incurred by a permanent establishment situated in another Member State which are exempt from income tax pursuant to a double taxation convention,

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but according to which the sum deducted must, in the tax assessment period concerned, be added back in the calculation of total income, to the extent to which, in a subsequent tax assessment period, a positive amount of income from commercial activities which is exempt from tax pursuant to the double taxation convention is generated by permanent establishments in that other Member State,

| — | subject in the latter case to an exception where the taxpayer can prove that, according to the provisions of the other Member State applicable to him, it is ‘in general ’not possible to claim deduction of losses in a year other than that in which those losses were incurred, which is not the case where, although a deduction of losses is in general possible according to the law of that State, it is not available to the taxpayer in the specific situation in which he finds himself? |
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subject in the latter case to an exception where the taxpayer can prove that, according to the provisions of the other Member State applicable to him, it is ‘in general ’not possible to claim deduction of losses in a year other than that in which those losses were incurred, which is not the case where, although a deduction of losses is in general possible according to the law of that State, it is not available to the taxpayer in the specific situation in which he finds himself?

| 2. | If the answer to (1) is in the affirmative: is the position in the State of residence affected if the limitations on deduction of losses applicable in the other Member State (being the source State) themselves contravene Article 31 of the Agreement on the European Economic Area on the ground that they discriminate against a taxpayer with income from his permanent establishment who is subject only to limited taxation there compared with a taxpayer who is subject to unlimited taxation there? |
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2.

If the answer to (1) is in the affirmative: is the position in the State of residence affected if the limitations on deduction of losses applicable in the other Member State (being the source State) themselves contravene Article 31 of the Agreement on the European Economic Area on the ground that they discriminate against a taxpayer with income from his permanent establishment who is subject only to limited taxation there compared with a taxpayer who is subject to unlimited taxation there?

| 3. | Further assuming that the answer to (1) is in the affirmative: must the State of residence refrain from retroactive recovery of tax on losses incurred by a permanent establishment situated in another Member State, to the extent to which those losses cannot otherwise be deducted in any Member State on the ground that the permanent establishment in that other Member State has been disposed of? |
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3.

Further assuming that the answer to (1) is in the affirmative: must the State of residence refrain from retroactive recovery of tax on losses incurred by a permanent establishment situated in another Member State, to the extent to which those losses cannot otherwise be deducted in any Member State on the ground that the permanent establishment in that other Member State has been disposed of?

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(1)  OJ 1994 L 1, p. 1.

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