Group relief and the Philips Electronics case

The case concerned a claim by Philips Electronics a UK company to offset losses of a UK branch (of a Dutch company) against its profits. The claims were made on the basis that the UK loss relief rules are contrary to European law specifically the freedom of establishment enshrined in Article 43EC (now Article 49 Treaty of the Functioning of the European Union). The CJEU which found in favour of the taxpayers on all questions held that broadly there is a restriction on the freedom of establishment for the UK to prevent UK branch losses being surrendered to a UK company and this restriction could not be justified. This means that Philips Electronics should now be able to offset losses of the UK branch against its UK...