# C_2018134EN.01000702.xml

| 16.4.2018 | EN | Official Journal of the European Union | C 134/7 |
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16.4.2018

EN

Official Journal of the European Union

C 134/7

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Judgment of the Court (First Chamber) of 22 February 2018 (requests for a preliminary ruling from the Hoge raad der Nederlanden — Netherlands) — X BV (C-398/16), X NV (C-399/16) v Staatssecretaris van Financiën

(Joined Cases C-398/16 and C-399/16) (1)

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((Reference for a preliminary ruling - Articles 49 and 54 TFEU - Freedom of establishment - Tax legislation - Corporation tax - Advantages linked to the formation of a single tax entity - Exclusion of cross-border groups))

(2018/C 134/09)

Language of the case: Dutch

Referring court

Referring court

Hoge raad der Nederlanden

Parties to the main proceedings

Parties to the main proceedings

Applicants: X BV (C-398/16), X NV (C-399/16)

Applicants:

Defendant: Staatssecretaris van Financiën

Defendant:

Operative part of the judgment

Operative part of the judgment

| 1. | Articles 49 and 54 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, pursuant to which a parent company established in a Member State is not allowed to deduct interest in respect of a loan taken out with a related company in order to finance a capital contribution to a subsidiary established in another Member State, whereas if the subsidiary were established in the same Member State, the parent company could avail itself of that deduction by forming a tax-integrated entity with it. |
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1.

Articles 49 and 54 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, pursuant to which a parent company established in a Member State is not allowed to deduct interest in respect of a loan taken out with a related company in order to finance a capital contribution to a subsidiary established in another Member State, whereas if the subsidiary were established in the same Member State, the parent company could avail itself of that deduction by forming a tax-integrated entity with it.

| 2. | Articles 49 and 54 TFEU must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, pursuant to which a parent company established in a Member State is not allowed to deduct from its profits capital losses derived from fluctuations in the exchange rate, in connection with the value of its shares in a subsidiary established in another Member State, where the same legislation does not provide, symmetrically, for tax to be levied on capital gains derived from those fluctuations. |
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2.

Articles 49 and 54 TFEU must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, pursuant to which a parent company established in a Member State is not allowed to deduct from its profits capital losses derived from fluctuations in the exchange rate, in connection with the value of its shares in a subsidiary established in another Member State, where the same legislation does not provide, symmetrically, for tax to be levied on capital gains derived from those fluctuations.

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(1)  OJ C 371, 10.10.2016.

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