Aures Holdings v Odvolaci financni reditelstvi

In Aures Holdings v Odvolaci financni reditelstvi (Case C-405/18) (27 February 2020) the CJEU found that a Czech law that did not allow a company to set off losses incurred in the Netherlands prior to migrating its residence to the Czech Republic was compatible with the EU freedom of establishment.

Aures holdings (AH) was incorporated and resident in the Netherlands. It incurred a tax loss in the Netherlands in 2007. In 2008 it set up a Czech permanent establishment and then in 2009 it migrated its effective place of management and tax residence to the Czech Republic; leaving its incorporation status as a Dutch company unchanged. In 2012 AH sought to set off the carried forward loss from 2007 against its Czech taxable profit. The Czech tax authority denied the deduction on the basis that the loss was not incurred in the Czech Republic.

The CJEU decided...