A member state was not allowed to impose a tax regime which discriminated against the subsidiaries of a company based in that state where they were based in other member states, but discrimination was allowed where the subsidiaries were based outside EU. United Kingdom legislation restricting fiscal reliefs or advantages to cases where the relevant companies are resident in the United Kingdom may be inconsistent with the EC Treaty. ICI remained bound by domestic legislation upon its ordinary meaning notwithstanding that in certain circumstances such a construction would be incompatible with European Community rights.
Europa In the context of the preliminary ruling procedure under Article 177, it is solely for the national courts before which proceedings are pending, and which must assume responsibility for the judgment to be given, to determine in the light of the particular circumstances of each case both the need for a preliminary ruling to enable them to give judgment and the relevance of the questions which they submit to the Court. A request for a preliminary ruling from a national court may be rejected only if it is manifest that the interpretation of Community law or the examination of the validity of a rule of Community law sought by that court bears no relation to the true facts or the subject-matter of the main proceedings.
Article 52 of the Treaty precludes legislation of a Member State which, in the case of companies established in that State belonging to a consortium through which they control a holding company, by means of which they exercise their right to freedom of establishment in order to set up subsidiaries in other Member States, makes a particular form of tax relief subject to the requirement that the holding company’s business consist wholly or mainly in the holding of shares in subsidiaries that are established in the Member State concerned.
Such legislation, which makes a tax advantage in the form of consortium relief available solely to companies which control, wholly or mainly, subsidiaries whose seat is in the national territory, applies the test of the subsidiaries’ seat to establish differential tax treatment of consortium companies established in that Member State and is not justified in terms of a need to ensure the cohesion of the national tax system arising from the fact that the revenue lost through the granting of tax relief on losses incurred by resident subsidiaries cannot be offset by taxing the profits of non-resident subsidiaries, since there is no direct link between the consortium relief granted for losses incurred by a resident subsidiary and the taxation of profits made by non-resident subsidiaries.
When deciding an issue concerning a situation which lies outside the scope of Community law, the national court is not required, under Community law, either to interpret its legislation in a way conforming with Community law or to disapply that legislation. Where a particular provision must be disapplied in a situation covered by Community law, but that same provision could remain applicable to a situation not so covered, it is for the competent body of the State concerned to remove that legal uncertainty in so far as it might affect rights deriving from Community rules.
Citations:
Times 20-Aug-1998, C-264/96, [1999] 1 WLR 108, [1998] ECR I-4695, [1998] STC 874, [1998] EUECJ C-264/96
Links:
Statutes:
Jurisdiction:
European
Citing:
Reference from – ICI Plc v Colmer (Inspector of Taxes) HL 15-Mar-1996
A ‘Holding company’ under the Act meant a company resident in the UK; A reference was made of the issues to the European Court. . .
At Court of Appeal – Imperial Chemical Industries v Colmer (Inspector of Taxes) CA 9-Aug-1993
Group tax relief was available despite other subsidiary companies within the same group being offshore. . .
Cited by:
At ECJ – Imperial Chemical Industries Plc v Colmer (Inspector of Taxes) (No 2) HL 18-Nov-1999
Where a group of companies sought consortium group relief, but the majority of the companies within the group were based outside the European Union, the court need not apply European Union standards to the test, but could instead apply the standards . .
Cited – Autologic Holdings Plc and others v Commissioners of Inland Revenue HL 28-Jul-2005
Taxpayer companies challenged the way that the revenue restricted claims for group Corporation Tax relief for subsidiary companies in Europe. The issue was awaiting a decision of the European Court. The Revenue said that the claims now being made by . .
Cited – Foulser and Another v HM Inspector of Taxes ChD 20-Dec-2005
The taxpayer company entered into an arrangement in which shares were purchased by a company based in Ireland and resold. A claim was made for holdover relief.
Held: The scheme failed. The restriction imposed did not infringe the right of . .
Cited – Hurst, Regina (on the Application of) v Commissioner of Police of the Metropolis v London Northern District Coroner HL 28-Mar-2007
The claimant’s son had been stabbed to death. She challenged the refusal of the coroner to continue with the inquest with a view to examining the responsibility of any of the police in having failed to protect him.
Held: The question amounted . .
Cited – Hurst, Regina (on the Application of) v Commissioner of Police of the Metropolis v London Northern District Coroner HL 28-Mar-2007
The claimant’s son had been stabbed to death. She challenged the refusal of the coroner to continue with the inquest with a view to examining the responsibility of any of the police in having failed to protect him.
Held: The question amounted . .
Lists of cited by and citing cases may be incomplete.
Corporation Tax
Updated: 03 June 2022; Ref: scu.161925