In brief
The Aures case is the ECJ’s latest judgment addressing situations involving ‘final losses’. While the ECJ has previously ruled that ‘final losses’ should (under circumstances) be taken into account in another member state than where they arose, so far the ECJ has never addressed its “final losses” doctrine in the context of company migrations.
The Aures case (C-405/18) is the ECJ’s latest judgment addressing situations involving ‘final losses’. While the ECJ has previously ruled that ‘final losses’ should (under circumstances) be taken into account in another member state than where they arose (e.g. in the context of terminated permanent establishments and liquidated/merged subsidiaries), so far the ECJ has never addressed its “final losses” doctrine in the context of company migrations. It seems to follow from the Aures case that the ‘final losses’ doctrine does not apply in the context of company migrations, because the ECJ considers loss-making resident companies not comparable with companies that incurred losses while they were a tax resident of another jurisdiction. Consequently, while company migrations may sometimes still be the preferable option for other reasons, companies with losses carried forward that plan to move their activities to other member states are advised to carefully evaluate whether such losses may be preserved (i.e. taken into account in another jurisdiction) by opting for a liquidation, merger or other restructuring alternative instead of a company migration.
