# C_2012331EN.01000401.xml

| 27.10.2012 | EN | Official Journal of the European Union | C 331/4 |
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27.10.2012

EN

Official Journal of the European Union

C 331/4

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Judgment of the Court (Fourth Chamber) of 6 September 2012 (reference for a preliminary ruling from the Upper Tribunal (Tax and Chancery Chamber) — United Kingdom) — The Commissioners for Her Majesty’s Revenue & Customs v Philips Electronics UK Ltd

(Case C-18/11) (1)

(Freedom of establishment - Tax legislation - Corporation tax - Tax relief - National legislation excluding the transfer of losses incurred in the national territory by a non-resident branch of a company established in another Member State to a company of the same group established in the national territory)

(2012/C 331/06)

Language of the case: English

Referring court

Upper Tribunal (Tax and Chancery Chamber)

Parties to the main proceedings

Applicant: The Commissioners for Her Majesty’s Revenue & Customs

Defendant: Philips Electronics UK Ltd

Re:

Reference for a preliminary ruling — Upper Tribunal (Tax and Chancery Chamber) (United Kingdom) — Interpretation of Article 49 TFEU — Freedom of establishment — Tax legislation — Corporation Tax — Tax relief — National legislation excluding the transfer of losses realised within the national territory by a non-resident branch of a company established in another Member State to a company established in the national territory belonging to the same group

Operative part of the judgment

| 1. | Article 43 EC must be interpreted as meaning that where, under the national legislation of a Member State, the possibility of transferring, by means of group relief and to a resident company, losses sustained by the permanent establishment in that Member State of a non-resident company is subject to a condition that those losses cannot be used for the purposes of foreign taxation, and where the transfer of losses sustained in that Member State by a resident company is not subject to any equivalent condition, such provisions constitute a restriction on the freedom of a non resident company to establish itself in another Member State. |
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1.

Article 43 EC must be interpreted as meaning that where, under the national legislation of a Member State, the possibility of transferring, by means of group relief and to a resident company, losses sustained by the permanent establishment in that Member State of a non-resident company is subject to a condition that those losses cannot be used for the purposes of foreign taxation, and where the transfer of losses sustained in that Member State by a resident company is not subject to any equivalent condition, such provisions constitute a restriction on the freedom of a non resident company to establish itself in another Member State.

| 2. | A restriction on the freedom of a non-resident company to establish itself in another Member State, such as that at issue in the main proceedings, cannot be justified by overriding reasons in the public interest based on the objective of preventing the double use of losses or the objective of preserving a balanced allocation of the power to impose taxes between the Member States or by a combination of those two grounds. |
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2.

A restriction on the freedom of a non-resident company to establish itself in another Member State, such as that at issue in the main proceedings, cannot be justified by overriding reasons in the public interest based on the objective of preventing the double use of losses or the objective of preserving a balanced allocation of the power to impose taxes between the Member States or by a combination of those two grounds.

| 3. | In a situation such as that in the main proceedings, the national court must disapply any provision of the national legislation which is contrary to Article 43 EC. |
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3.

In a situation such as that in the main proceedings, the national court must disapply any provision of the national legislation which is contrary to Article 43 EC.

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(1)  OJ C 89, 19.3.2011.

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