EU court backs M&S in tax ruling with conditions
Posted on: Tuesday, 13 December 2005, 03:55 CST
BRUSSELS (Reuters) - The European Union's top court ruled on Tuesday that British retailer Marks & Spencer can claim tax relief from losses outside its home market with certain conditions, in a judgment that could cost European governments billions of euros.
"Where in one Member State the resident parent company demonstrates to the tax authorities that those conditions are fulfilled, it is contrary to freedom of establishment to preclude the possibility for the parent company to deduct from its taxable profits in that Member State the losses incurred by its non-resident subsidiary," the European Court of Justice in Luxembourg said in a statement.
The condition was that the loss-making subsidiaries are unable to claim tax relief in the country where they are established, it said.
Source: REUTERS
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