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European Commission - Press release

Taxation: Commission requests the United Kingdom to amend its corporate tax legislation providing for exit taxes on companies

Brussels, 22 March 2012 – The European Commission has formally requested the United Kingdom to amend its legislation providing for exit taxes on companies.

The UK legislation at stake results in immediate taxation of unrealised capital gains in respect of certain assets when the seat or place of effective management of a company is transferred to another EU/EEA State. However, a similar transfer within the UK would not generate any such immediate taxation and the relevant capital gains would only be taxed once they have been realised.

The Commission considers that the United Kingdom has failed to fulfil its obligations under EU rules by maintaining these restrictive provisions. Exit taxes may breach the freedom of establishment as they make it more expensive to transfer a company seat or place of effective management to another Member State than to another location in the UK.

The Commission's request takes the form of a reasoned opinion (second step of EU infringement proceedings). In the absence of a satisfactory response within two months, the Commission may refer the United Kingdom to the Court of Justice of the European Union.


Exit taxes are taxes typically levied when a legal or natural person leaves a given tax jurisdiction (i.e. change of tax residence), in the case at stake this refers to companies that move their registered seat or place of effective management to another EU/EEA State. For press releases on infringement cases in the taxation or customs field see:

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

For the latest general information on infringement measures against Member States see:

Contacts :

Emer Traynor (+32 2 292 15 48)

Natasja Bohez Rubiano (+32 2 296 64 70)

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