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2013-10 E.C.R. 1 (2013)

handle is hein.intyb/rcbjcofi0352 and id is 1 raw text is: VRw Reports of Cases Case C-322/11 K (Request for a preliminary ruling from the Korkein hallinto-oikeus) (Reference for a preliminary ruling - Articles 63 TFEU and 65 TFEU - Free movement of capital - Tax legislation of a Member State which does not allow deduction of the loss on the sale of immovable property situated in another Member State from the gain on the sale of securities in the Member State of taxation) Summary - Judgment of the Court (First Chamber), 7 November 2013 Free movement of capital and liberalisation of payments - Restrictions - Tax legislation - Income tax - Tax rules of a Member State not allowing deduction of the loss on the sale of immovable property situated in another Member State from revenue from moveable assets in the Member State of taxation - Whether permissible - Justifications - Balanced allocation of the power to impose taxes between the Member States - Need to ensure the cohesion of the tax system of the Member State - Proportionality (Arts 63 TFEU and 65 TFEU) Articles 63 TFEU and 65 TFEU do not preclude national tax legislation which does not allow a taxpayer who resides in the Member State concerned and is fully liable to income tax there to deduct the losses arising on a transfer of immovable property situated in another Member State from the income from moveable assets which is taxable in the first Member State, although that would have been possible, on certain conditions, if the immovable property had been situated in the first Member State. Admittedly, such a difference in treatment on the basis of the place where the immovable property is situated is liable to deter a taxpayer from investing in immovable property in another Member State and therefore constitutes a restriction on the free movement of capital, prohibited in principle by Article 63 TFEU. However, where the result of applying the double-tax convention in conjunction with the tax legislation of the Member State of taxation is that that State does not exercise any tax powers over the profits deriving from the transfer of immovable property situated in the other Member State, the refusal to allow deduction of losses arising from the sale of the immovable property concerned permits the symmetry between the right to tax profits and the right to deduct losses to be safeguarded. Furthermore, having regard to the objective pursued by the tax legislation concerned, a direct link exists, in the case of the same taxpayer and the same tax, between, on the one hand, the tax advantage granted, namely the taking into account of losses generated by a capital investment, and, on the other, the taxation of returns on that investment. Consequently, that legislation may be ECLI:EU:C:2013:716 1

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