Must the Residence State Allow a Deduction for Foreign-Source Losses in the European Union?

This article discusses a pending ECJ case concerning the Finnish tax system, which prevents a Finnish resident individual from deducting foreign losses. The author examines the issue in light of the free movement of capital principle and concludes that, while the Finnish system constitutes a restriction on this principle, it may be justified on the basis of the coherence of the Finnish tax system and the balanced allocation of taxing rights.