By Alice McDonald
On 27 February 2014 Advocate-General Kokott gave her Opinion in three joined cases concerning the Dutch fiscal unity regime. Under this system companies within a corporate group may file a single tax return and have their liability for Dutch corporation tax calculated on a consolidated basis as a single tax entity.
The relevant issue in SCA Group Holding & Ors was whether companies which were part of a multinational corporate group but themselves established in the Netherlands could take advantage of the fiscal unity regime. The Dutch tax authority held that such companies established in the Netherlands were unable to do so, on the basis that without the linked non-resident companies, there would be no corporate group to speak of.
The three joined cases before the ECJ concerned different group structures, although each had the common feature of having members of the corporate group established in another Member State. The Advocate-General considered that there was a restriction of freedom of establishment in respect of both a non-resident parent company with foreign subsidiaries, and a resident parent company with foreign subsidiaries. She also considered that there was no justification for these restrictions.
This article appears in the JHA March 2014 Tax Newsletter, which also features:
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