When are exit charges unlawful?

On 8 September 2011, Advocate General Kokott of the European Court of Justice (ECJ) delivered her Opinion in the case of National Grid Indus BV concerning Dutch exit taxation. Although the ECJ’s decision is not likely to follow until around March 2012, the Advocate General has opined on the circumstances under which an exit charge is likely to be contrary to the EC Treaty. In particular, she states that an exit charge may be unlawful unless: (a) the charge can be deferred in certain circumstances until the time that the underlying assets in question are actually realised; and (b) if the quantum of the charge takes into account later losses.