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Europäische Kommission – Pressemitteilung

Commission refers Germany to Court over tax treatment of group companies (Organgesellschaften)

Brussels, 22 March 2012 – The Commission has decided to refer Germany to the European Court of Justice for excluding certain non-resident companies from the benefits of its corporation tax fiscal unity regime (Organschaft).

Under German law, a company cannot be part of a fiscal unity if its registered office is outside Germany even if its place of effective management is in Germany. In practice, even if such a company would be fully liable to pay tax in Germany, it would be deprived from the tax benefits of the fiscal unity regime. One of the benefits of this regime is the domestic offsetting of profits and losses within the fiscal unity in Germany. This breaches EU rules on the freedom of establishment. The Commission therefore considers that German rules disadvantage foreign companies in comparison with domestic competitors and that these companies may be deterred from establishing business in Germany.


The German incriminated provisions concern the double requirement that both the company seat and the place of effective management have to be in Germany. After the Commission issued a reasoned opinion (see IP/10/662), Germany published an administrative circular in 2011 to eliminate the infringement. However, according to the case law of the Court of Justice, an infringement caused by a legal provision can only be effectively eliminated by amending the law and not by a mere circular. As Germany did no change its law within one year, the Commission has decided to pursue the procedure.

The referral to the Court of justice is the last step in the infringement procedure after a letter of formal notice and a reasoned opinion has been sent.

For press releases issued on infringement proceedings in the area of taxation or customs see:

For more information on EU infringement procedures, see MEMO/12/200

For the most up-to-date general information on the infringement proceedings initiated against Member States, see:

Contacts :

Emer Traynor (+32 2 292 15 48)

Natasja Bohez Rubiano (+32 2 296 64 70)

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