30.9.2006   

EN

Official Journal of the European Union

C 237/3

1.

Is it contrary to Article 52, in conjunction with Article 58, of the EC Treaty (now Article 43 EC, in conjunction with Article 48 EC) for the Federal Republic of Germany, as the State of origin, to treat a currency loss of a German controlling company resulting from the repatriation of so-called start-up capital granted to an Italian establishment as being part of that establishment's profits and to exclude that loss, on the basis of the exemption under Articles 3(1), 3(3) and 11.1(c) of the 1925 Double Taxation Convention between Germany and Italy, from the basis of assessment for German tax, even though the currency loss cannot form part of the establishment's profits to be assessed for purposes of taxation in Italy and thus cannot be taken into account in either the State of origin or in the State in which the establishment is situate?

2.

If Question 1 is answered in the affirmative: is it contrary to Article 52, in conjunction with Article 58, of the EC Treaty (now Article 43 EC, in conjunction with Article 48 EC) if the currency loss mentioned above is to be included in the basis for assessment of the German tax but may be deducted as operating expenditure only in so far as no tax-free profits are achieved by the Italian establishment?