European Union - The Freedom of Establishment and Recapture of PE Losses under the Merger Directive
- European Union
- M. den Toom; H. van den Broek
- European Taxation, 2018 (Volume 58), No 2/3
- 22 January 2018
Recent ECJ case law addresses situations in which PE losses are recaptured at the head office level following a cross-border reorganization pursuant to which a PE is wound up or transferred to a different company. This article examines whether the recapture rule, under article 10(1) of the Merger Directive (2009/133), restricts the freedom of establishment and, if so, whether a justification applies. Does a recapture go beyond what is necessary to attain the objectives pursued?