Vermeulen, H.

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UvA-DARE is a service provided by the library of the University of Amsterdam (https://dare.uva.nl)UvA-DARE (Digital Academic Repository)Bevola: The 'Marks & Spencer Exception' Is Still Alive!Vermeulen, H.Publication date2018Document VersionFinal published versionLink to publicationCitation for published version (APA):Vermeulen, H. (Author). (2018). Bevola: The 'Marks & Spencer Exception' Is Still Alive!. Webpublication or website, Kluwer International Tax Blog.http://kluwertaxblog.com/2018/09/12/bevola-marks-spencer-exception-still-alive/General rightsIt is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s)and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an opencontent license (like Creative Commons).Disclaimer/Complaints regulationsIf you believe that digital publication of certain material infringes any of your rights or (privacy) interests, pleaselet the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the materialinaccessible and/or remove it from the website. Please Ask the Library: https://uba.uva.nl/en/contact, or a letterto: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. Youwill be contacted as soon as possible.Download date:10 Mar 2023Bevola: The ‘Marks & Spencer Exception’ Is Still Alive! - Kluwer International Tax Bloghttp://kluwertaxblog.com/2018/09/12/bevola-marks-spencer-exception-still-alive/[10-4-2019 12:12:30]Kluwer International Tax Blog       EU/EEA, TAX POLICYBevola: The ‘Marks & Spencer Exception’ IsStill Alive!Hein Vermeulen (Amserdam Centre for Tax Law (ACTL) of the University of Amserdam, EU DirectTax Group (EUDTG) PwC) / September 12, 2018 / Leave a commentThe Marks & Spencer case (C-446/03 ), in which the Grand Chamber of the Court of Jusice ofthe European Union rendered its decision that fnal losses incurred by its non-residentsubsidiary can be deducted in the Member State of the resident parent company, caused acommotion. This doctrine is considered to be a violation on the sovereign right of a MemberState to levy taxes on their own profts and losses. After all, with the Marks & Spencerexception a Member State is being forced to exercise its tax jurisdiction asymmetrical: (fnal)foreign losses are deductible, while foreign profts are not being taxed. The Court concludedthis in the so called fourth sep of its (rule of reason) analysis. After the Court had decided thatMarks & Spencer had access to Union law (frs sep) and that the parent company with a non-resident subsidiary was in the same position as a parent company with a resident subsidiary(second sep), the Court rendered its decision that the diference in treatment was jusifed byoverriding reasons in the public interes. However, the measure was not appropriate forensuring the attainment of the objective that it pursued and went beyond what was necessary inorder to attain it respectively, as far as it concerned fnal losses. Although it is undersandablefrom an internal market point of view, it sill caused a lot of commotion.The case Timac Agro (C-388/14 ) also caused a lot of fuss, even though this case concernslosses from a foreign permanent esablishment insead of losses from a non-residentsubsidiary. From this case, it follows that a resident company with a foreign permanentesablishment is not in a comparable situation as a resident company with a domesic business,in a situation in which the Member State does not exercise its tax jurisdiction over the foreignpermanent esablishment. In this case the Court had not come around to the third (and fourth)Bevola: The ‘Marks & Spencer Exception’ Is Still Alive! - Kluwer International Tax Bloghttp://kluwertaxblog.com/2018/09/12/bevola-marks-spencer-exception-still-alive/[10-4-2019 12:12:30]sep. In other words, unequal cases may be treated unequally.Has this put the Marks & Spencer exception aside? After all, it could be said that also theMember State of the parent company does not exercise its tax jurisdiction over the foreignsubsidiary, jus as Germany did not exercise its tax jurisdiction over the foreign permanentesablishment in Timac Agro. Again, the Grand Chamber of the Court gives the answer to thisquesion in the recent Bevola case (C-650/16 ). That case concerns the situation in which aMember State does not exercise its tax jurisdiction over a resident company with a foreignpermanent esablishment of which the activities are being ceased and a non-deductible lossremains in the source sate. The Grand Chamber of the Court held that the aforementionedMarks & Spencer exception is also applicable in this situation. In between, the Court makes itclear, especially in points 33 et seq, that the Timac Agro case needs to be read diferently thandescribed above. If a Member State applies diferent rules on resident companies with domesicand with foreign esablishments, then this cannot be legitimate criterion for assessing theobjective comparability of these situations. Otherwise, the freedom of esablishment wouldefectively turn into a dead letter. As far as it concerns fnal losses, a resident company with aforeign permanent esablishment and a resident company with a resident permanentesablishment are comparable. So the Court did not recall Marks & Spencer, but confrms its(old) doctrine: Marks & Spencer is sill alive (and kicking)!________________________To make sure you do not miss out on regular updates from the Kluwer International Tax Blog,please subscribe here.Vind ik leuk 0 Tweet EMAILLIKE? SHARE WITH YOUR FRIENDS.Share BEWAREN

Bevola: The 'Marks &amp; Spencer Exception' Is Still Alive!

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Bevola: The 'Marks & Spencer Exception' Is Still Alive!

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Bevola: The 'Marks &amp; Spencer Exception' Is Still Alive!

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Bevola: The 'Marks & Spencer Exception' Is Still Alive!