ECJ: exit charges allowed but company must be able to defer payment | Practical Law

ECJ: exit charges allowed but company must be able to defer payment | Practical Law

The ECJ has ruled that freedom of establishment does not preclude exit charges that determine the tax on a company's latent gains at the time it transfers its place of management to another member state. However, recovery of that tax at that time, without the possibility of deferral, is not compatible with that freedom. (National Grid Indus BV v Inspecteur van de Belastingsdienst Rijnmond/kantoor Rotterdam (Case C‑371/10).)

ECJ: exit charges allowed but company must be able to defer payment

Practical Law UK Legal Update 7-514-4716 (Approx. 13 pages)

ECJ: exit charges allowed but company must be able to defer payment

by PLC Tax
Published on 12 Jan 2012 • European Union, The Netherlands, United Kingdom
The ECJ has ruled that freedom of establishment does not preclude exit charges that determine the tax on a company's latent gains at the time it transfers its place of management to another member state. However, recovery of that tax at that time, without the possibility of deferral, is not compatible with that freedom. (National Grid Indus BV v Inspecteur van de Belastingsdienst Rijnmond/kantoor Rotterdam (Case C‑371/10).)