Treatment of Losses in an EU Corporate Tax Group: Ending a Series of Unfortunate Events

Abstract: This article elaborates on how losses will be treated in the absence of the CCCTB. Three questions are to be answered by this article. First, how should a corporate tax group be defined in the EU? Second, in the lack of purview on the (upstream and horizontal) profits shifting (which would deploy transfer pricing regulations), how should intra–group crossborder offset of losses (with the possibility of double dip of losses) within an EU corporate tax group be justified? Finally, how should the treatment of losses in an EU corporate tax group be harmonized? In order to obtain the answers to those questions, this paper analyzes four domestic tax laws of Member States related to those issues, as well as the European Commission documents on corporate taxation.

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