- The principle of territoriality and cross-border loss compensation
- Volume | Issue number
- 39 | 3
- Pages (from-to)
- Document type
- Faculty of Law (FdR)
- Amsterdam Center for Tax Law (ACTL)
Member States are free to define their income tax base. They may in principle disregard foreign-sourced income, resulting in the impossibility of cross-border loss compensation. The European Court of Justice (ECJ) has accepted the principle of territoriality as a criterion for the division of the authority to tax, but its understanding of the concept of territoriality seems to differ from the current understanding of that concept in international tax law. Moreover, the ECJ does not accept all consequences of the application of territoriality, in particular, regarding the taxation of individuals (e.g., the Renneberg case). For individuals, the non-discrimination principle seems to override the recognition of sovereign assumption of fiscal jurisdiction. This raises questions such as how to apply the Schumacker criterion in loss situations and whether the ECJ's reasoning in De Groot extends to deduction of losses.
If you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library, or send a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible.