# C_2013114EN.01000901.xml

| 20.4.2013 | EN | Official Journal of the European Union | C 114/9 |
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20.4.2013

EN

Official Journal of the European Union

C 114/9

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Judgment of the Court (Fourth Chamber) of 21 February 2013 (request for a preliminary ruling from the Korkein hallinto-oikeus — Finland) — A Oy

(Case C-123/11) (1)

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(Freedom of establishment - Article 49 TFEU - Tax legislation - Merger of a parent company established in one Member State with a subsidiary established in another Member State - Deductibility by the parent company of the subsidiary’s losses arising from its activity - Exclusion for non-resident subsidiaries)

2013/C 114/10

Language of the case: Finnish

Referring court

Referring court

Korkein hallinto-oikeus

Parties to the main proceedings

Parties to the main proceedings

Applicant: A Oy

Applicant:

Re:

Re:

Request for a preliminary ruling — Korkein hallinto-oikeus — Interpretation of Articles 49 TFEU and 54 TFEU — Freedom of establishment — National tax legislation — Merger with a parent company established in one Member State of a subsidiary having ceased activity in another Member State — Deductibility by the absorbing company, in the Member State in which it is established, of the consolidated losses of the absorbed company resulting from that company’s activity in the other Member State

Operative part of the judgment

Operative part of the judgment

| 1. | Articles 49 TFEU and 56 TFEU do not, in the circumstances of the main proceedings, preclude national legislation under which a parent company merging with a subsidiary established in another Member State, which has ceased activity, cannot deduct from its taxable income the losses incurred by that subsidiary in respect of the tax years prior to the merger, while that national legislation allows such a possibility when the merger is with a resident subsidiary. Such national legislation is none the less incompatible with European Union law if it does not allow the parent company the possibility of showing that its non-resident subsidiary has exhausted the possibilities of taking those losses into account and that there is no possibility of their being taken into account in its State of residence in respect of future tax years either by itself or by a third party; |
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1.

Articles 49 TFEU and 56 TFEU do not, in the circumstances of the main proceedings, preclude national legislation under which a parent company merging with a subsidiary established in another Member State, which has ceased activity, cannot deduct from its taxable income the losses incurred by that subsidiary in respect of the tax years prior to the merger, while that national legislation allows such a possibility when the merger is with a resident subsidiary. Such national legislation is none the less incompatible with European Union law if it does not allow the parent company the possibility of showing that its non-resident subsidiary has exhausted the possibilities of taking those losses into account and that there is no possibility of their being taken into account in its State of residence in respect of future tax years either by itself or by a third party;

| 2. | The rules for calculating the non-resident subsidiary’s losses for the purpose of their being taken over by the resident parent company, in an operation such as that at issue in the main proceedings, must not constitute unequal treatment compared with the rules of calculation which would be applicable if the merger were with a resident subsidiary. |
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2.

The rules for calculating the non-resident subsidiary’s losses for the purpose of their being taken over by the resident parent company, in an operation such as that at issue in the main proceedings, must not constitute unequal treatment compared with the rules of calculation which would be applicable if the merger were with a resident subsidiary.

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(1)  OJ C 145, 14.5.2011.

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