Case Comment on CJEU C-405/18 AURES Holdings

This is a brief case comment on a judgment by the Court of Justice. The taxpayer in this case sought a deduction for losses incurred in the Netherlands prior to its change of residence to the Czech Republic, relying on the freedom of establishment to claim that denying the loss deduction would restrict it right to move without facing discrimination. Following its Advocate General, the Court dismissed this argument, holding that the situation of a company that had incurred losses at a time when it was outside of the tax jurisdiction of a Member State was not comparable to the situation of a company that incurred losses while being subject to that Member State's jurisdiction. The decision does not hold particular surprises, but is an important piece in search for a unified theory of two separate lines of jurisprudence: that concerning foreign loss relief and that concerning exit taxation.