Judgment of the Court (Fourth Chamber) of 15 May 2008 (reference for a preliminary ruling from the Bundesfinanzhof, Germany) — Lidl Belgium GmbH & Co. KG v Finanzamt Heilbronn

(Case C-414/06) (1)

(Freedom of establishment - Direct taxation - Taking account of losses incurred by a permanent establishment situated in a Member State and belonging to a company which has its registered office in another Member State)

(2008/C 171/09)

Language of the case: German

Referring court

Bundesfinanzhof

Parties to the main proceedings

Applicant: Lidl Belgium GmbH & Co. KG

Defendant: Finanzamt Heilbronn

Re:

Preliminary ruling — Bundesfinanzhof — Interpretation of Articles 43 EC and 56 EC — Deduction from a German company's taxable profits of losses resulting from the activities of a permanent establishment in another Member State — Refusal of such deduction on the basis of a bilateral convention concluded with that other Member State for the purpose of preventing double taxation

Operative part of the judgment

Article 43 EC does not preclude a situation in which a company established in a Member State cannot deduct from its tax base losses relating to a permanent establishment belonging to it and situated in another Member State, to the extent that, by virtue of a double taxation convention, the income of that establishment is taxed in the latter Member State where those losses can be taken into account in the taxation of the income of that permanent establishment in future accounting periods.

(1)  OJ C 326, 30.12.2006.