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Finanzamt Linz v Bundesfinanzgericht, Außenstelle Linz

Depreciation of goodwill and freedom of establishment

In Finanzamt Linz v Bundesfinanzgericht Außenstelle Linz C-66/14 (6 October 2015) the CJEU found that a provision which only allowed the depreciation of goodwill in relation to holdings in resident subsidiaries was in breach of EU law.

Under Austrian law a parent company acquiring a holding in an Austrian resident company which becomes a member of its group can depreciate the goodwill up to a maximum of 50% of the purchase price. However no goodwill depreciation is allowed in the case of an acquisition in a non-resident company. IFN an Austrian company had therefore been denied any goodwill depreciation on the acquisition of a holding in a company established in Slovakia.

IFN contended that the relevant Austrian provisions were in breach of TFEU art 49 on the freedom of establishment.

The CJEU confirmed that the...

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