EC tax review 2012/4 - Mr.Dr. Q.W.J.C.H. Kok
On 29 November 2011, the European Court of Justice (ECJ) issued its ruling in the National Grid Indus case regarding the compatibility of exit taxes and the freedom of establishment. In this ruling, the ECJ ruled that levying an exit tax as such is not an infringement on the freedom of establishment, but it is not proportional to collect the exit tax immediately. Upon request of the taxpayer, collection has to be deferred until the built-in gains in the assets/liabilities are realized. Although the decision leaves some questions unanswered, the principal issue regarding the compatibility of exit taxes with European Union (EU) law is now resolved.In the past, the European Commission had started infringement cases regarding exit taxation against Member States whose exit tax legislation allegedly was not in line with EU law. Now that the ECJ has ruled in the National Grid Indus case,those Member States should start to amend their legislation to bring it in line with the requirements set out by the ECJ.
Post a Comment