The Chartered Institute of Taxation (CIOT) is calling for the Government to agree to the European Commission request to implement in full the European Court of Justice (ECJ) judgement in Marks & Spencer
on cross border loss compensation.
In the legislation, meant to implement the Marks & Spencer
ruling, the United Kingdom imposes conditions on cross border group relief which make it virtually impossible for taxpayers to benefit from the relief. The Commission considers that this is contrary to the EC Treaty. The request is in the form of a ‘reasoned opinion’ under Article 226 of the EC Treaty. If the United Kingdom does not reply satisfactorily to the reasoned opinion within two months, the Commission may refer the matter to the European Court of Justice.
Ian Menzies-Conacher, Chairman of the CIOT’s Technical Committee, says: “The CIOT welcomes the European Commission request. Taxpayers require certainty in order to operate their businesses successfully and this requires that the UK law should be properly aligned with our international tax obligations. We very much hope that the Government will amend the law as soon as possible and without the need for further ECJ involvement. We consider that there are other areas, such as the taxation of Controlled Foreign Companies and dividends, where the UK has not fully implemented the judgments of the ECJ.”
We hope the Treasury will look again at these other areas and would be happy to work with the Treasury on such a review.
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Notes to Editors
To read the ruling please click here.