CJEU – Recent Developments in Direct Taxation 2018

1. S. 34Introduction

On 19 June 2018 the Czech Supreme Administrative Court decided to request a preliminary ruling from the CJEU on whether the concept of freedom of establishment within the meaning of Article 49 of the TFEU can be held to cover a simple transfer of the place of a company´s management.

2. Facts of the case

On 19 March 2014 the Czech tax authority initiated a tax audit of the tax subject AAA Auto Group N.V. – organizational unit in order to remove doubts regarding the corporate income tax return for the period 1 January 2012 to 31 January 2012. The aim of the tax authority was to assess the legitimacy of the application of loss credit in 2007 (by the organizational unit), which had been assessed by the Dutch tax authority in relation to the founder of the organizational unit – foreign company AAA Auto Group N.V. The tax payer applied the loss credit based on Article 34 (1)(2) of the Czech Income Tax Act.

The tax payer has stated as the main reason for the application of loss credit the fact that on 1 January 2009, its place of effective management was transferred from the Netherlands to the Czech Republic to the address at which the organizational unit had already been esta...