The Advocate General of the European Court of Justice (ECJ) issued an opinion on 22 January 2015 in the case of X AB v Skatteverket. In this case the Supreme Administrative Court of Sweden had asked the ECJ for a preliminary ruling on whether Articles 49 and 63 of the Treaty on the Functioning of the EU (TFEU) operate to prevent national tax laws whereby the member state of domicile does not give a tax deduction for a currency loss that is an integral part of a capital gain or capital loss on holdings for business purposes in a company domiciled in another member state.

Article 49 TFEU is concerned with the freedom of establishment of nationals of a member state in another member state. Article 61 provides that any restrictions on the freedom to provide services that remain in a member state should be applied without distinction on grounds of nationality or residence to all persons providing services.

The Advocate General’s opinion was that Art 49 of the TFEU applies to this case and does not prevent legislation where the member state of domicile does not give a tax deduction for a currency loss in this situation, if the member state of domicile has a system where capital gains and losses on these assets are completely exempt from taxation.

The ECJ can take note of the opinion of the Advocate General but is not obliged to follow that opinion. The ECJ may therefore reach a different conclusion when it issues its final decision.