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Greece will have to answer to the EU Court of Justice for its income tax legislation




The Court of Justice of the European Union will have to rule on Belgian taxation (photo: F.Dubessy)
The Court of Justice of the European Union will have to rule on Belgian taxation (photo: F.Dubessy)
GREECE. The European Commission decided on Friday, October 30, 2020, to refer Greece to the Court of Justice of the European Union (CJEU). The country applies different income tax treatment on the one hand for losses incurred by companies in their home market and on the other hand for losses incurred in another EU/EEA (European Economic Area) state. At the same time, both categories of corporate profits are taxable in Greece.

The Greek legislation is in question precisely because it provides for limited deductibility of tax losses incurred abroad by subsidiaries of Greek companies.

The European Commission had already initiated an infringement procedure against Athens in 2018 on the grounds that "this difference in treatment constitutes a restriction on the right of establishment". A letter of formal notice was sent to the Greek government, followed in 2019 by a reasoned opinion giving the country two months to regularize.

 

Frédéric Dubessy


Friday, October 30th 2020



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