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In its decision of 20 December 2017, the Court of Justice of the European Union ruled that section 50d(3) German Income Tax Act (Einkommensteuergesetz; "EStG"; 2007) violates the Parent-Subsidiary Directive as well as the freedom of establishment and is, thus, contrary to European Union law. The decision referred to the version of the 2007 Annual Tax Act (Jahressteuergesetz), effective until the end of 2011, but, in view of the reasons given by the CJEU, it must equally be doubted that the current provision is in conformity with European Union law. Preliminary ruling proceedings regarding the current provision are already pending before the CJEU (Financial Court Cologne, decision dated May 17, 2017, 2 K 773/16).

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