CJEU Holds Germany May Disallow Deduction of Final Losses of a German Company's PE Where the PE's Profits are Exempt Under a Tax Treaty

On 22 September 2022, the Court of Justice of the European Union (CJEU) issued its judgment on whether the German tax authority's refusal to take into account the final losses of a taxpayer's permanent establishment in another EU Member State violated the freedom of establishment. The tax authority refused to take into account the final losses because the profits of the establishment were exempt in Germany under a tax treaty. The case is summarized as follows as previously reported on the Ad…