In the Official Journal of the European Union of October 10, 2016 two sets of questions regarding the freedom of establishment that were referred from the Dutch Supreme Court to the Court of Justice of the European Union (CJEU) were published. Both requests were lodged with the CJEU on July 18, 2016.

Case C-398/16 - X BV versus Staatssecretaris van Financiën

The first request was made in the case of X BV versus the Staatssecretaris van Financiën. In this case the following question was referred to the CJEU for a preliminary ruling:

“Must Articles 43 EC and 48 EC (now Articles 49 TFEU and 54 TFEU) be interpreted as precluding national legislation on the basis of which a parent company established in a Member State is not allowed to deduct interest in respect of a loan associated with a capital contribution made to a subsidiary established in another Member State, whereas that deduction could have been availed of if that subsidiary had been included with that parent company in a single tax entity — with characteristics such as those of a Netherlands single tax entity — in view of the fact that, in that case, by reason of consolidation, there would be no obvious association with such a capital contribution?”

Case C-399/16 - X NV versus Staatssecretaris van Financiën

The second request was made in the case of X NV versus the Staatssecretaris van Financiën. In this case the following questions were referred to the CJEU for a preliminary ruling:

“1.  Must Articles 43 EC and 48 EC (now Articles 49 TFEU and 54 TFEU) be interpreted as precluding national legislation on the basis of which a parent company established in a Member State cannot take into account a currency loss in connection with the amount which it has invested in a subsidiary established in another Member State, whereas it would be able to do so if that subsidiary were to be included in a single tax entity — with characteristics such as those of the Netherlands single tax entity — with that parent company established in the first-mentioned Member State, as a result of consolidation within the single tax entity?

2.   If the answer to Question 1 is in the affirmative: can or must the point of departure for determining the currency loss to be taken into account be that (one or more of) the direct and indirect subsidiaries indirectly held by the parent company concerned, through the subsidiary in question, and established in the European Union, should also be included in the single tax entity?

3.   If the answer to Question 1 is in the affirmative: should account be taken only of currency losses that would have been reflected on the parent company’s inclusion in the single tax entity in the years to which the dispute relates, or should the currency exchange results that would have been reflected in earlier years also be taken into account?”

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