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ECJ Ruling on Cross-Border Loss Relief in Mergers

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The ECJ has on 31 January 2013 in its preliminary ruling C-123/11 confirmed that the Finnish provisions restricting the transfer and utilisation of the tax losses of a non-Finnish subsidiary by its Finnish parent company in a cross-border merger scenario are, in principle, acceptable,

but only to the extent that the non-Finnish subsidiary has exhausted all possibilities to utilise these tax losses in its own country of residence and that there is no possibility of their being taken into account in its country of residence in respect of future tax years either by itself of by a third party (the exhaustion test).

The ECJ left, however, the question and determination of 'final losses' to be dealt by the Finnish Supreme Administrative Court. The decision of the Supreme Administrative Court can generally be expected within the next six months.

For further information, please contact Mr. Niklas Thibblin at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Mr. Jouni Kautto at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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