# C_2016068EN.01001401.xml

| 22.2.2016 | EN | Official Journal of the European Union | C 68/14 |
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22.2.2016

EN

Official Journal of the European Union

C 68/14

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Judgment of the Court (Third Chamber) of 17 December 2015 (request for a preliminary ruling from the Finanzgericht Köln — Germany) — Timac Agro Deutschland GmbH v Finanzamt Sankt Augustin

(Case C-388/14) (1)

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((Reference for a preliminary ruling - Tax legislation - Corporation tax - Freedom of establishment - Non-resident permanent establishment - Avoidance of double taxation by exemption of the income of the non-resident permanent establishment - Taking account of losses incurred by that permanent establishment - Reincorporation of the losses deducted previously in the event that the non-resident establishment is transferred - Definitive losses))

(2016/C 068/17)

Language of the case: German

Referring court

Referring court

Finanzgericht Köln

Parties to the main proceedings

Parties to the main proceedings

Applicant: Timac Agro Deutschland GmbH

Applicant:

Defendant: Finanzamt Sankt Augustin

Defendant:

Operative part of the judgment

Operative part of the judgment

| 1. | Article 49 TFEU must be interpreted as not precluding a Member State’s tax regime, such as that at issue in the main proceedings, under which, in the event of transfer by a resident company to a non-resident company within the same group of a permanent establishment situated in another Member State, the losses previously deducted in respect of the establishment transferred are reincorporated into the taxable profit of the transferring company where, under a double taxation convention, the income of such a permanent establishment is exempt from tax in the Member State in which the company to which that establishment belonged has its seat. |
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Article 49 TFEU must be interpreted as not precluding a Member State’s tax regime, such as that at issue in the main proceedings, under which, in the event of transfer by a resident company to a non-resident company within the same group of a permanent establishment situated in another Member State, the losses previously deducted in respect of the establishment transferred are reincorporated into the taxable profit of the transferring company where, under a double taxation convention, the income of such a permanent establishment is exempt from tax in the Member State in which the company to which that establishment belonged has its seat.

| 2. | Article 49 TFEU is to be interpreted as not precluding a Member State’s tax regime, such as that at issue in the main proceedings, which, in the event of transfer by a resident company to a non-resident company within the same group of a permanent establishment situated in another Member State, excludes the possibility, for the resident company, of taking into account in its tax base the losses of the establishment transferred where, under a double taxation convention, the exclusive power to tax the profits of that establishment lies with the Member State in which the establishment is situated. |
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2.

Article 49 TFEU is to be interpreted as not precluding a Member State’s tax regime, such as that at issue in the main proceedings, which, in the event of transfer by a resident company to a non-resident company within the same group of a permanent establishment situated in another Member State, excludes the possibility, for the resident company, of taking into account in its tax base the losses of the establishment transferred where, under a double taxation convention, the exclusive power to tax the profits of that establishment lies with the Member State in which the establishment is situated.

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(1)  OJ C 372, 20.10.2014.

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