Global

Details

  • Service: Tax, International Corporate Tax, Mergers & Acquisitions, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 10/24/2012

Slovenia - Tax benefits under national law vs. Merger Directive 

October 24: The Court of Justice of the European Union (CJEU) held that Slovenian rules that impose a time limit within which taxpayers must apply for relief are not prohibited under the Merger Directive (Council Directive 90/434/EEC), and that it is for the Slovenian national court to determine whether the application of this time limit is sufficiently clear to enable taxpayers to benefit from the provisions of the Directive.Pelati d.o.o. v Republika Slovenija, C-603/11 (18 October 2012)

2012)

Read the judgment: Pelati

Background

A Slovenian company, on transferring part of its undertaking to a new company, applied to claim “tax advantages” as provided for under Slovenian law that implemented the rules of the Merger Directive.


The company applied for application of these advantages on 21 October 2005, but after the transaction had taken place on 12 October 2005.


The Slovenian tax authorities rejected the application on the grounds that the company did not make it within the prescribed time limits set out in Slovenia law—i.e., at least 30 days before the transaction in question took place.


The question referred to the CJEU was whether this time limit was contrary to Article 22 of the Merger Directive that allowed EU Member States to elect not to apply the directive in the case of tax evasion of avoidance.

CJEU judgment

The CJEU held that the Merger Directive does not preclude this provision of Slovenian law, but that it is for the national court to determine whether the application of this time period is sufficiently clear to enable taxpayers to benefit from the provisions of the directive.


Read an October 2012 report [PDF 55 KB] prepared by KPMG’s EU Tax Centre: CJEU decisions—interpretation of Parent Subsidiary and Merger Directives




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