Cross Border Loss Relief

Abstract: The problem to be examined in this research is on the tax treatment of losses in cross border situations as addressed in the European cases and the adaptation or implementation of the final decision of the European Court of Justice (ECJ) by different European states to their respective national laws as required by the EU law . The main issue was on the transfer of losses between different independent companies, belonging to the same group, located in different jurisdictions. The specific scenario was in the case C-446/03 Marks & Spencer plc vs. David Halsey (His Majesty’s Inspector of Taxes) (Marks & Spencer) which involved the transfer of losses from foreign subsidiaries (in France, Belgium and Germany) to parent company (in the UK). The problem analyzed in this paper lies on those circumstances in the case and to find out then, whether this is possible? If so, to what extent and to which effect?