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Verder LabTec GmbH & Co. KG v Finanzamt Hilden

In Verder LabTec GmbH & Co. KG v Finanzamt Hilden (C-657/13) (21 May 2015) the CJEU held that EU law does not preclude the imposition of a staggered charge on unrealised capital gains at the time an asset is transferred from one member state to another.

Verder a German limited partnership had transferred intellectual property rights to its Dutch permanent establishment. The German tax authorities considered that this transfer triggered a duty of disclosure of the unrealised capital gains and that payment of the tax should be staggered on a straight line basis over a period of ten years. Verder contended that this was in breach of the principle of freedom of establishment.

The CJEU accepted that the measures at issue could deter a company established in Germany from transferring its assets to another member state in circumstances where the same transfer within German...

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