Press Release: Corporate taxation: Commission requests the United Kingdom to properly implement an ECJ ruling on cross-border loss compensation

The European Commission sent the United Kingdom a formal request to properly implement the European Court of Justice (ECJ) judgment in Marks & Spencer on cross border loss compensation. In the legislation meant to implement the Marks & Spencer ruling, the United Kingdom imposed conditions on cross border group relief which make it virtually impossible for tax payers to benefit from the relief. The Commission considered that this is contrary to the EC Treaty. The request was 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.