Order of the Court (Eighth Chamber) of 6 November 2007 – Stahlwerk Ergste Westig
(Case C‑415/06)
First subparagraph of Article 104(3) of the Rules of Procedure – Answer clearly able to be deduced from case-law – Free movement of capital – Taxation on income – Company having permanent establishments in a non-Member State – Account taken of losses incurred by those establishments
1. Preliminary rulings – Answer clearly able to be deduced from case-law – Application of Article 104(3) of the Rules of Procedure (Rules of Procedure of the Court, Art. 104(3)) (see paras 9-10)
2. Freedom of movement for persons – Freedom of establishment – Provisions of the Treaty – Scope (Arts 43 EC and 56 EC) (see paras 14, 16, 18-19 and operative part)
Re:
Preliminary ruling – Bundesfinanzhof – Interpretation of Articles 56 EC, 57(1) EC and 58 EC – Deduction from the taxable profits of a German company of losses resulting from the activity of a permanent establishment in a non-member country – Deduction refused on the basis of a bilateral double taxation convention concluded with that non-member country.
Operative part:
A national system of taxation under which a company having its head office in a Member State, when determining its results, cannot deduct losses incurred by an establishment in a non-Member State fundamentally affects the exercise of the freedom of establishment within the meaning of Articles 43 EC to 48 EC. Those provisions cannot be relied upon in a situation involving such an establishment in a non-Member State.
Full & Egal Universal Law Academy