Direct Taxation: The Commission proposes an EU co-ordinated approach on relief for losses incurred in other Member States (cross-border loss relief)

IP/06/1828
Brussels, 19 December 2006

In the framework of an EU-coordinated approach in direct taxation (IP/06/1827), the European Commission invites Member States to explore ways of allowing companies to set off losses incurred in other Member States. In most Member States, domestic losses may be set-off against other profits in the same Member State. However, there is only limited availability for such relief for losses incurred in other Member States. The lack of cross-border relief for losses in the Member States' legislations creates a barrier to entering other markets and therefore undermines the international competitiveness of European companies. The Communication examines several solutions aiming at removing these obstacles.