A case was brought before the European Court of Justice (ECJ) concerning the question of whether Finland’s rules for carrying forward tax losses were contrary to the state aid provisions in Article 107 of the Treaty on the Functioning of the European Union (TFEU). Finland’s tax law permits the taxpayer to carry forward losses for ten years and offset them against available business profits.
The ECJ determined in the decision issued on 18 July 2013 that these tax provisions may fall under the definition of state aid if it can be established that the system of prohibiting loss carry forward in the case of change of ownership of the company is the normal system, and the special permission procedure is an exception to this normal system.
The ECJ also held that there is under the state aid provisions a difference in the treatment of existing aid, this being aid that was already established as part of the law before the state aid provisions applied to it.
