European Commission sends reasoned opinion to Germany regarding rules applied to cross-border loss offset

On 18 October 2007, the European Commission announced that it had sent a reasoned opinion (second step of the infringement procedure under Art. 226 of the EC Treaty) requesting Germany to modify its legislation on cross-border loss deduction which the Commission considers to be incompatible with the EC freedom of establishment and the EC free movement of capital.

While losses generated in Germany can be offset without limitation within the same income …