EU says French losses may be offset against UK tax

[Will]

The European court has upheld a claim by Marks & Spencer allowing it to claim losses made when closing European subsidiaries, including subsidiaries in France, against British tax. See http://news.bbc.co.uk/2/hi/business/4523860.stm.

This could be of considerable interest to anybody relocating buinesses from one European country to another, involving setting up, and subsequently closing, subsidiaries.

Interestingly, several other countries, including France, backed Britain's case against M&S in court.

[Tony the Turner]

I doubt if the effect of the decision will be as far-reaching as some commentators have suggested.  As always, the devil tends to be in the detail.  M&S were able to get the decision in their favour because they closed down completely their French, German and Belgian stores, had no pre-existing profits in those countries and so were not able to off-set losses there. Moreover, M&S had their HQ in the UK. The European Court made it plain that the tax payer must exhaust all remedies nationally before being able to look elsewhere. 

The reason the French Government supported the UK Government was that it could see the boot being on the other foot, e.g. with UK based subsidiaries of a French business seeking to offset UK losses (PSA?)

I can't see it having much impact on your average LF reader!

[maxsan]

Maybe maybe not, but, it might just have an impact on those people who have small companies in the UK and wish to sell a product in France.  It could be that the by product of this ruling might be that anyone running abusienss across borders can do so legitimately without setting up in the country they are selling to. Who knows. 

[Russethouse]

[quote user="INTERNESTED"]Maybe maybe not, but, it might just have an impact on those people who have small companies in the UK and wish to sell a product in France.  It could be that the by product of this ruling might be that anyone running abusienss across borders can do so legitimately without setting up in the country they are selling to. Who knows. [/quote]

I think thats wishful thinking ! (and a l-o-n-g way down the road)

 

 

[Owens88]

>It could be that the by product of this ruling might be that anyone running abusienss across borders can do so legitimately without setting up in in the country they are selling to

 

I wonder about this. Are we talking products or services ? 

 Surely I can make a widget in the UK and sell it anywhere in eu without setting up a local company to do so. Didn't we use to call that exporting ?

John