Official Journal of the European Union

EN

C series

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C/2025/4440

18.8.2025

(Case C-410/25)

(C/2025/4440)

Language of the case: German

Parties

Applicant: European Commission (represented by: W. Roels and C. Vollrath, acting as Agents)

Defendant: Federal Republic of Germany

Form of order sought

The applicant claims that the Court should:

—declare that, by adopting and maintaining in force the tax scheme under which non-resident companies without a permanent establishment in Germany cannot claim the tax advantage for reinvestment, the Federal Republic of Germany has failed to fulfil its obligations under Article 63 TFEU and Article 40 of the Agreement on the European Economic Area;

—order the Federal Republic of Germany to pay the costs.

Pleas in law and main arguments

The proceedings concern provisions of German tax law under which, in the event of the sale of certain capital assets, it is possible not to tax immediately the capital gains realised, where the taxable person newly purchases or produces certain capital assets within a period specified by law. Instead, taxation of those capital gains resulting from the sale of the original assets may be deferred, by means of a transfer of the corresponding hidden reserves, until the sale of the newly purchased or produced assets.

However, that deferral of taxation is granted only if, at the time of the sale, the capital assets have formed part of the assets of a permanent establishment situated within the national territory for an uninterrupted period of at least six years.

According to the European Commission, it follows from the interplay between various provisions of German tax law that, where that tax advantage is applied, a difference in treatment to the detriment of non-resident companies without a permanent establishment in Germany arises. That difference in treatment infringes Article 63 TFEU and Article 40 of the Agreement on the European Economic Area.

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ELI: http://data.europa.eu/eli/C/2025/4440/oj

ISSN 1977-091X (electronic edition)

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