CJEU – Recent Developments in Direct Taxation 2023

1. Introduction

This chapter explores the last case originating from the UK before Brexit: Gallaher Limited v The Commissioners for Her Majesty’s Revenue & Customs (Case C-707/20), a preliminary reference to the Court of Justice from the Upper Tribunal (“UT”) in a tax case concerning the conformity of the UK’s legislation on intra-group transfers of assets with EU law, namely the freedom of establishment provided for in Article 49 of the Treaty on the Functioning of the European Union (TFEU), and the free movement of capital referred to in Article 63 of TFEU.

Gallaher is the first ruling issued by the Court of Justice regarding intra-group transfers of assets. The main issue in this case was whether EU law precludes a Member State from imposing an immediate tax charge on gains arising from a disposal of assets from a company resident in that Member State to a company within the same group which is resident in another Member State or a third country.

Section II of this paper describes the dispute in the main proceedings. Section III summarises the judgement delivered by the Court of Justice on 16 February 2023.

S. 2382. The dispute in the main proceedings

2.1. UK’s legislation on intra-group t...