The advocate general has issued an opinion on a consortium relief issue referred to the European Court of Justice (ECJ) by the First Tier Tribunal (Tax Chamber) in the UK. The issue concerned a residence requirement imposed on the link company as part of the consortium relief rules.
The advocate general opined that Articles 49 and 54 of the TFEU would not permit a member state to require a link company to be resident in that member state or be trading through a permanent establishment in that member state for the purposes of the consortium relief provisions. Articles 49 and 54 would not prevent a member state imposing a residence requirement for the lowest common parent of the group to which the link company and the companies receiving the tax losses all belong.
It should be noted however that the opinion of the Advocate General is issued for guidance and that the ECJ is not obliged to follow the opinion of the Advocate General when arriving at its decision.
