The Lawfulness of the Restriction of Losses - On the European Union (EU) Law Impact on the Deduction of Losses Incurred Abroad

Abstract

In view of case law from Danish courts, the article will analyse whether provisions, such as the previously existing Danish provision in section 5 G of the Danish Tax Assessment Act, are inconsistent with the freedoms in EU law, which grant the right to free establishment within the borders of the EU. The article will illustrate the problem via a Danish High Court decision, SKM 2011.486 ØL, where the High Court held that the Danish provision was not inconsistent with community law, as it merely eliminates the risk of double dip, which, according to the High Court, is in compliance with existing EU law. Taking as its starting point the Danish decision, which will be reproduced in detail herein, the article will analyse the basis in EU law for deducting losses incurred abroad. The article uses the Danish provision as a platform for analysing the claims of EU law.