Tom O’Shea: ECJ Rules Against U.K. Group Loss Relief Rules – El TJUE falla en contra de la legislación del Reino Unido sobre compensación de pérdidas intragrupo

220px-Philips_930Case Philips Electronics UK, C-18/11- Asunto Philips Electronics UK, C-18/11

Trending topics: freedom of establishment, fiscal consolidation, doble use of losses, scope of the balanced allocation of taxing rights – libertad de establecimiento, tributación de grupos de sociedades, doble amprovechamiento de pérdidas, ámbito de aplicación del reparto equilibrado del poder tributario.

Tom O’Shea has just published a relevant comment to ECJ Philips Electronics case (see our previous post on this judgment): ECJ Rules Against U.K. Group Loss Relief Rules, Tax Notes International, December, 3, 2012.

“Philips Electronics is the latest in the line of cases, including ICI (C-264/96) and Marks & Spencer (C-446/ 03), in which the group relief rules of the United Kingdom were challenged by taxpayers on EU law compliance grounds. Philips Electronics U.K. Ltd is a U.K. resident company and a part of the Philips international group with an ultimate parent company resident in the Netherlands. That parent company entered into a joint venture with LG Electronics. That joint venture resulted in the creation of a subsidiary in the Netherlands (LG-.PD.Netherlands) with a branch in the United Kingdom that made losses. Philips Electronics sought to offset some losses from the LG.PD.Netherlands branch against its profits. This was denied by the U.K. tax athorities because under the U.K.’s consortium relief rules the losses could be set against the profits of LG-.PD. Netherlands in the Netherlands. Philips Electronics argued that the U.K.’s consortium relief rules amounted to a restriction on the freedom of establishment”.

“The situation in Philips Electronics may be distinguished from the one at issue in cases like Marks & Spencer (C-446/03) and X Holding BV (C-337/08). In Philips Electronics, the losses were incurred in the United Kingdom (the establishment state) — they were not incurred in another member state. In Marks & Spencer and X Holding BV, the losses were incurred in another member state (establishment state) and an attempt was made to use them in the origin member state. In other words, an attempt was made to bring them across the border. There is no such attempt in Philips Electronics.

The Court noted in paragraph 25 of Philips Electron-ics that: the power of the host Member State, on whose territory the economic activity giving rise to the losses of the permanent establishment is carried out, to impose taxes is not at all affected by the possibility of transferring, by group relief and to a resident company, the losses sustained by a permanent establishment situated in its territory. As the Court explained, the objective of preserving a balanced allocation of taxing rights between the member states is based on the need ‘‘to safeguard the symmetry between the right to tax profits and the right to deduct losses.’’

In other words, in the circumstances of this case, it was the Netherlands that might make the complaint that balance in the allocation of taxing rights was affected, not the United Kingdom. In coming to this conclusion, the Court echoed the reasoning of the judges in the First Tier Tribunal (Tax) in the United Kingdom … The highly detailed and comprehensive judgment of the First Tier Tribunal in the United Kingdom is there- fore fully vindicated by the ECJ in its judgment in Philips Electronics. The taxpayer wins and once again the United Kingdom’s group relief rules will need to be changed in order to comply with EU law”.

Many thanks for this interesting paper, dear Tom.

Tom O’Shea acaba de publicar un valioso comentario a la sentencia Philips Electronics (vease el post en que analizábamos dicha sentencia): ECJ Rules Against U.K. Group Loss Relief Rules, Tax Notes International, December, 3, 2012. Resumimos aquí sus principales conclusiones:

“Philips Electronics es el último caso de una línea jurisprudencial (ICI y Marks & Spencer) que analiza la compatibilidad de la legislación del Reino Unido sobre compensación de pérdidas intragrupo con el Derecho de la Unión Europea. Philips Electronics U.K. Ltd. es una sociedad residente en el Reino Unido integrada en el grupo multinacional Philips, cuya casa matriz reside en Holanda. Dicha sociedad matriz estableció una “joint venture” con LG Electronics que dio lugar a la creación de una filial en Holanda (LG.P-D.Netherlands) con un establecimiento permanente en el Reino Unido que generó pérdidas. La sociedad residente en el Reino Unido buscó compensar parte de sus beneficios con las pérdidas generadas por el establecimiento permanente. Esto fue rechazado por las autoridades del Reino Unido, pues -según su normativa sobre grupos de sociedades- dichas pérdidas sólo podían ser compensadas en Holanda. Philips electronics consideró que tales reglas quebrantaban la libertad de establecimiento.

(…)

“La situación de Philips Electronics debe distinguirse de la que concurría en Marks & Spencer (C-446/03) y X Holding BV (C-337/08). En Philips Electronics las pérdidas tuvieron lugar en el Reino Unido (el Estado de establecimiento) y no en otros Estados miembros. En Marks & Spencer y X Holding BV las pérdidas tuvieron lugar en otro Estado miembro (el Estado de establecimiento) y se intentó usarlas en el Estado de origen. En otras palabras, se intentó una compensación de pérdidas transfronteriza que no concurre en Philips Electronics.

La Corte señaló en el fundamento 25 de Philips Electronics que el poder tributario del Estado de acogida en cuyo territorio se desarrollaba la actividad económica que generaba las pérdidas del establecimiento permanente no quedaba afectado por la posibilidad de que dicho establecimiento transfiriera las pérdidas a una sociedad residente. Como explica el Tribunal, el objetivo de preservar el reparto equilibrado del poder tributario entre los Estados miembros se basa en la necesidad de “preservar la simetría entre el derecho a gravar los beneficios y el derecho a deducir las pérdidas”.

En otras palabras, en las circunstancias de este caso, era Holanda y no el Reino Unido quien podía haber alegado el quebrantamiento en el reparto equilibrado del poder tributario”.

Muchas gracias por este interesante artículo, querido Tom.

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